
Dollar slips after rally, focus shifts to US-China trade talks
The US dollar index dipped 0.07% to 99.045, as yields on US Treasury tenors eased marginally after Friday's jump. (Reuters pic)
NEW YORK : The US dollar slipped against all major currencies today, as exuberance over an upbeat US employment report gave way to caution ahead of pivotal US-China trade talks set to take place in London later in the day.
The talks come at a crucial time for both economies, with China grappling with deflation and trade uncertainty dampening sentiment among US businesses and consumers, prompting investors to reassess the dollar's safe-haven status.
Treasury secretary Scott Bessent, commerce secretary Howard Lutnick and trade representative Jamieson Greer are expected to represent the US at the trade talks, while vice premier He Lifeng would likely be present with the Chinese delegation.
'A deal to keep talking might be better than nothing, but unless we see a concrete breakthrough, the impact on sentiment is likely to remain muted,' said Charu Chanana, chief investment strategist at Saxo Markets.
Friday's upbeat US jobs report yielded some relief for investors following other bleak economic data last week.
The dollar advanced against major peers after the employment report, which cut weekly declines in the dollar index by more than half.
However, it is still down by more than 8.6% for the year.
Today, the yen firmed 0.31% at 144.425 per dollar, as data showed Japan's economy contracted at a slower-than-expected pace in the January-March period, while Prime Minister Shigeru Ishiba weighed in on the impact interest rates could have on the economy.
The euro edged up 0.18% and was last at US$1.1417 as markets continued to price-in the European Central Bank's hawkish monetary policy outlook issued last week.
The Swiss franc inched up 0.17% to 0.8209 per dollar, while the sterling rose 0.27% to US$1.3555.
The dollar index, which measures the US currency against six others, dipped 0.07% to 99.045, as yields on US Treasury tenors eased marginally after Friday's jump.
Also on the trade front was a report that said Japan's chief trade negotiator Ryosei Akazawa is planning a sixth round of talks in Washington.
An inflation report out of the US for the month of May will be in the spotlight later in the week as investors and Federal Reserve (Fed) policymakers look for evidence on the damage trade restrictive policies have had on the economy.
Fed officials are in a blackout period ahead of their policy meeting next week, but they have signalled that they are in no rush to cut interest rates and signs of better-than-feared economic resilience are likely to further cement their stance.
Interest rate futures indicate that investors are anticipating the central bank may cut borrowing costs by 25 basis points, with the earliest move expected in October this year, according to data compiled by LSEG.
'May is the first month where the impact of Trump's 10% universal tariff on imports ex-USMCA is expected to show.
'The Fed will want a few months of inflation data in order to judge the tariff impact and most importantly, its persistence,' analysts at ANZ Bank said.
Elsewhere, China's offshore yuan was last at 7.187 per dollar after data showed export growth slowed to a three-month low in May, while factory-gate deflation deepened to its worst level in two years.
New Zealand's dollar last bought US$0.6037, while the Australian dollar inched up 0.25% at US$0.6511 in light volumes as markets were closed for a public holiday.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


The Star
3 hours ago
- The Star
Beijing woos US influencers with free trip to show ‘real China'
China seeks to enlist young social media influencers from the United States to collaborate with its local content creators. - Photo: AFP BEIJING: China is inviting American influencers to join a 10-day, all-expense paid trip through the country in July, as part of Beijing's efforts to boost people-to-people exchanges and showcase the 'real China'. The initiative, titled 'China-Global Youth Influencer Exchange Programme', seeks to enlist young social media influencers with at least 300,000 followers to collaborate with Chinese content creators, according to recruitment posts by Chinese state-affiliated media outlets, including the China Youth Daily. While relations between China and the US have deteriorated in recent months over issues including geopolitics, technology and trade, the programme marks an effort to boost cultural exchanges. In 2024, President Xi Jinping had called for more exchanges between Chinese and American universities, after previously announcing a plan to welcome 50,000 American students to China. Another post in College Daily, a publication particularly targeting Chinese students in North America, specified that applicants for the exchange programme based in the US should be active on platforms such as Instagram, YouTube, TikTok and X, and should 'love Chinese culture' and 'have no history of bad behaviours'. It called on Chinese students overseas to encourage influencers in their circle to apply, and said the successful candidates will get China's official invite as well as special assistance from the state to process their visas. The trip intends to take the participants across five Chinese cities – Suzhou, Shanghai, Shenzhen, Handan and Beijing, and will cover China's e-commerce hubs, the headquarter of companies such as Xiaohongshu Technology Co and BYD Co. The influencers will also partake in cultural activities such as Taichi and be able to live-stream their trip to the Great Wall, according to the posts. Working with Chinese social media influencers on ideas, and getting their content promoted by China's state media will be part of the deal. Social media content from Western influencers travelling through China post-Covid-19 have won praise from the state media for their authentic portrayal of everyday life in the country. In April, American streamer IShowSpeed's visit to China sparked widespread curiosity among fans about advancements in Chinese technology. The authorities have tapped social media influencers to check negative information and promote positive contents. In 2023, think-tank Australian Strategic Policy Institute analysed over 120 foreign influencers, mostly active on Chinese social media, received the state's help to grow their influence in return for content that praises and spreads Beijing's narrative. - Bloomberg


The Sun
4 hours ago
- The Sun
Ringgit weakens as US-China trade talks continue in London
KUALA LUMPUR: The ringgit depreciated against the US dollar today as market attention remained fixed on the second day of United States-China trade discussions in London. At 6 pm, the local note fell to 4.2360/2420 versus the greenback, down from Monday's close of 4.2290/2345. UOB Kay Hian Wealth Advisors Sdn Bhd head of investment research Mohd Sedek Jantan said across broader markets, foreign exchange volatility is gradually subsiding, and in subdued trading conditions, investors appear to be allocating capital towards currencies offering elevated yields. Meanwhile, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the ringgit continues to maintain its range-bound trade as uncertainties remain. 'The US Dollar Index (DXY) appears to be gaining some strength today, rising by 0.24 per cent to 99.174 points as fear over a slowing economy receded following the nonfarm payrolls (NFP) results last Friday and optimism over trade negotiations between the US and China,' he told Bernama. At the close, the ringgit traded mostly higher against a basket of major currencies. It rose against the Japanese yen to 2.9270/9314 from Monday's 2.9344/2.9384 and strengthened versus the British pound to 5.7152/7233 from 5.7392/7466, but fell vis-à-vis the euro to 4.8354/8422 from 4.8316/8379 yesterday. The local currency traded lower against its ASEAN peers. It fell versus the Singapore dollar to 3.2932/2981 from 3.2908/2953 at Monday's close and declined against the Thai baht to 12.9712/9955 from 12.9414/9642. The ringgit slid vis-à-vis the Philippine peso to 7.58/7.60 from 7.57/7.59 yesterday and eased against the Indonesian rupiah to 260.2/260.7 from 259.5/260.0 previously.


New Straits Times
4 hours ago
- New Straits Times
Stocks mostly fall as China-US resume trade talks
LONDON: Major stocks markets mostly dropped in Asia and Europe on Tuesday as investors waited for the outcome of US-China talks aimed at cementing a fragile trade war truce between the world's two biggest economies. London's benchmark FTSE 100 index bucked the trend as it was on course to close at a record high after weak UK unemployment data raised chances the Bank of England will cut interest rates into next year. "US-China trade talks are the main focus for investors," noted Neil Wilson, UK investor strategist at Saxo Markets. "A good outcome could send Wall Street to a fresh record high" when trading resumes Tuesday, he added. The world's two biggest economies are holding a second day of trade talks in London, seeking to shore up a shaky tariff truce in a bitter row deepened by export curbs. One of US President Donald Trump's top advisers said he expected "a big, strong handshake" at the end of the discussions. Trump told reporters at the White House: "We are doing well with China. China's not easy. "I'm only getting good reports." The agenda is expected to be dominated by exports of rare earth minerals used in a wide range of things including smartphones, electric vehicle batteries and green technology. "Investors remain on tenterhooks as talks between the US and China spill over to today, with a nuanced situation yet to be resolved," said Richard Hunter, head of markets at Interactive Investor. "For the time being, the pause in tariff hostilities is a positive starting point as the US seeks the restoration of rare earth mineral exports from China which would inevitably result in a mutual relaxation." Investors are awaiting also key US inflation data this week, which could impact the Federal Reserve's monetary policy. Analysts warn Trump's tariffs will refuel inflation, strengthening the argument to keep interest rates on hold instead of lowering them. The Fed faces pressure from the president to cut rates, with bank officials due to make a decision at their policy meeting next week. While the Bank of England is expected to pause on rates at its next meeting this month, analysts now see it cutting on at least two occasions this year and again in early 2026 after Tuesday's jobs data, which also showed slowing wages growth. News of dampened inflationary pressure weighed heavily on the pound, boosting the London stock market, which has benefitted this year from the UK government striking post-Brexit trade agreements with the US and India. Prime Minister Keir Starmer's Labour administration has managed also to shield Britain against Trump's most severe tariff rates.