- The US dollar index is holding steady as speculation around the US trade situation grows.
- Trump has indicated that trade talks with China are still in progress, though there are no direct discussions planned for this week.
- Trump also stated he won’t try to replace Federal Reserve Chairman Jerome Powell before his term is up in May 2026.
The US Dollar Index (DXY), which tracks the dollar against six major currencies, is attempting to recover after a dip. Currently, it’s trading around 99.80. The dollar is experiencing pressure due to the escalating concerns about trade relations with China. Traders are looking ahead to the US ISM Services PMI for further indicators later in the session.
Over the weekend, President Trump confirmed ongoing trade negotiations with China, yet disclosed that there are no immediate discussions scheduled with President Xi Jinping this week. On Friday, China’s Commerce Department mentioned it was mulling over a US suggestion to resume trade discussions.
Trump’s recent remarks regarding tariffs have piqued the interest of market observers, especially those in US businesses contemplating shifting operations from China. He mentioned on Sunday that the impact of these high tariffs is significant and acknowledged, “At some point, I’m going to lower them, because otherwise you can’t do business with them and they really want to do business.”
On the monetary front, Trump affirmed he wouldn’t seek to replace Jerome Powell as Federal Reserve chair before his term ends in May 2026. He has criticized Powell as being “completely harsh,” but has suggested that he believes rates should ultimately be reduced. Additionally, Trump announced plans to instruct US trade representatives and the Commerce Department to start the process of enforcing a 100% tariff on diplomatic films.
In other economic news, Friday’s non-farm payroll (NFP) report showed that the economy added 177,000 jobs in April, surpassing the forecast of 130,000, although it was a drop from the revised March figure of 185,000. Meanwhile, the unemployment rate held steady at 4.2%, while average hourly earnings rose by 3.8% year-on-year.
