SINGAPORE — The US dollar was steady on Tuesday in tight trading as Washington and Beijing remained locked in trade talks that left investors on edge and hesitant in placing major bets while looking ahead to US inflation report later in the week.
Top economic officials from the world’s two largest economies sought to defuse a bitter dispute that has widened from tariffs to restrictions over rare earths, with trade talks extending to a second day in London.
The talks come after US President Donald Trump and Chinese President Xi Jinping spoke by phone last week and at a crucial time for both economies, which are showing signs of strain from Trump’s cascade of tariff orders since January.
The lack of firm details from the talks despite positive notes from some officials and Trump meant the currency markets were frigid in Asian hours as traders held their position, reluctant to make major moves.
The US dollar was little changed against the yen at 144.57 in early trading. The euro last fetched $1.1425 and sterling was 0.1 percent firmer at $1.3563.
“The extension of talks and some positive soundbites from the US officials could offer short-term relief, markets are unlikely to buy into this optimism without real structural progress,” said Charu Chanana, chief investment strategist at Saxo.
Washington and Beijing are trying to revive a temporary truce struck in Geneva that had briefly lowered trade tensions and calmed markets.
“Unlike the Geneva talks, where tariff relief provided easy wins, the London talks are now tackling thornier issues like chip export controls, rare earths, and student visas,” said Chanana.
“These are long-term, strategic matters—not easily resolved over a few days. That makes it harder to deliver a positive surprise.”
