- The dollar is seeing slight gains, but investors are feeling cautious due to rising trade uncertainties.
- Risk appetite remains limited as trade discussions between the European Union and Japan have stalled.
- DXY is up 0.15% from Monday’s low, yet still 1% lower than last week’s peak.
The US dollar is trading moderately higher against its main counterparts today, but it’s still a good bit down from last week’s high.
Discussions between the EU and Japan are still ongoing. Eurozone negotiators have pointed out that increasing demand from the US is complicating matters. They’re preparing to introduce retaliation measures, targeting US services, public contracts, and investments.
In Japan, chief negotiator Akazawa is in Washington trying to move negotiations forward, although reaching an agreement remains challenging. On Monday, Trump expressed frustration over the low sales of American cars and US-produced rice in Japan, while Treasury Secretary Bescent emphasized the importance of contract quality over timing.
Given this context, there’s a shift in focus, with major currencies displaying some fluctuations. The DXY, which tracks the US dollar against other widely traded currencies, is around 97.50 after bouncing back from 97.25 on Monday, but it’s still about 1% off last week’s high of near 98.50.
This story was updated to clarify that the DXY was significantly higher on Tuesday, rather than what was previously stated.
