US Dollar Strengthens as US-China Trade Truce Eases Market Tensions

The US dollar surged to a one-month high following a temporary trade agreement between the US and China, which reduced reciprocal tariffs and alleviated fears of an escalating trade war. Tariffs on Chinese imports to the US were cut from 145% to 30%, while Chinese tariffs on US goods dropped from 125% to 10%.

Currency markets reacted sharply, with the dollar gaining 2% against the Japanese yen and 1.7% against the Swiss franc. The euro and British pound, meanwhile, faced downward pressure as investors shifted focus to upcoming US economic data, including the Consumer Price Index and retail sales figures, which could influence Federal Reserve policy.

Market sentiment remains cautiously optimistic, though attention is turning to whether the truce will hold and how central banks might adjust monetary policy in response to shifting trade dynamics.