"The greenback had fallen at the end of last week when Trump threatened to impose 100% tariffs on Chinese imports starting November 1, in retaliation for Beijing's export restrictions on rare earth materials. Over the weekend, however, Trump said in a Truth Social post that trade relations "will all be fine," while Vice President JD Vance added that Washington remains open to negotiations if China "is willing to be reasonable.""
"The reversal eased fears of an immediate escalation in trade tensions, though investors remain cautious amid Beijing's warnings of retaliation if the US moves forward with the proposed duties. The brief episode reignited recent memories of the trade war, when tariff uncertainty weighed on global growth and triggered sharp market volatility. Any renewed confrontation between the world's two largest economies could again challenge risk sentiment and complicate the Federal Reserve's policy outlook."
"U.S. Treasury yields fell, with the 10-year note hovering near 4%, its lowest level in a month, as investors sought safety in bonds. Markets now turn their attention to Tuesday's speech by Fed Chair Jerome Powell, which could provide fresh guidance on the path of monetary easing and add volatility across foreign exchange and fixed-income markets."
On Monday the dollar index recovered part of Friday's losses after President Donald Trump softened his tone toward China. The greenback had fallen after Trump threatened 100% tariffs on Chinese imports starting November 1 in retaliation for Beijing's export restrictions on rare earth materials. Trump's Truth Social post said trade relations "will all be fine," and Vice President JD Vance said Washington remains open to negotiations if China "is willing to be reasonable." The reversal eased fears of immediate escalation, but investors remained cautious amid Beijing's warnings of retaliation. U.S. Treasury yields fell, with the 10-year near 4% as investors sought safety. Markets await Fed Chair Jerome Powell's speech for guidance on monetary easing and potential volatility.
Read at London Business News | Londonlovesbusiness.com
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