FX.co ★ Dollar Stabilizes as US-China Trade Tensions Ease

The dollar index stabilized around 99 on Monday after experiencing a sharp decline in the previous session. This shift came after President Donald Trump retracted his threat to impose significant tariffs on China. In a post on Truth Social, Trump assured that trade relations with China "will all be fine." Vice President JD Vance supported this statement, indicating that the United States is open to negotiations if China demonstrates a willingness to be reasonable. The index had dropped approximately 0.5% on Friday following Trump's warning of a potential 100% tariff on Chinese products, set to commence on November 1, in response to China's latest export controls on rare earth materials and related technologies. This reminder of ongoing trade tensions kept investors on edge. Meanwhile, the dollar gained strength against the yen, as markets reevaluated the likelihood of LDP leader Sanae Takaichi becoming Japan's next prime minister, following Komeito's exit from the ruling coalition on Friday. However, the dollar maintained its losses against the euro after France announced a new cabinet line-up on Sunday.