The U.S. dollar experienced a significant surge on Monday, following the U.S. and China’s agreement to decrease their reciprocal tariffs, enhancing confidence in U.S. assets while reducing fears of an extended trade war.

Tariff Reductions Propel Dollar Value

• U.S. tariffs on Chinese goods decreased from 145% to 30%.

• Chinese tariffs on U.S. imports have fallen from 125% to 10%.

• The Dollar Index surged 1% to reach its highest point in a month, reversing much of April’s losses.

Investors hailed the quick tariff reductions, with Arne Petimezas from AFS Group acknowledging that President Trump moved quicker than many anticipated, making the tariffs “more manageable, if only temporarily.”

Currency Market Shifts

The dollar’s ascent came at the cost of traditional safe-haven currencies:

• USD/JPY climbed 2% to hit 147.835.

• USD/CHF increased 1.7% to 0.845.

• EUR/USD dropped 1.3% to 1.1097, marking its most considerable drop this year.

• GBP/USD fell by 1% to 1.3185.

Senior strategist Kenneth Broux from Société Générale suggested these developments might indicate a carried adjustment, indicating a more robust recovery for the dollar parallel to U.S. equities and yields.

Following Future FX Developments

As trade negotiations progress, it remains crucial for exporters, importers, and international investors to monitor currency fluctuations regularly. Our daily exchange-rate monitoring tools allow users to stay informed about critical trends in foreign currency markets.