NEW YORK – The dollar posted its first weekly gain since mid-March last week after China granted some tariff exemptions for US imports, raising hopes that the trade war between the world’s two largest economies may be closer to abating.
The dollar rose against a basket of currencies, up around 0.07 percent on the day and set for a modest weekly gain, its first since the middle of March.
“I don’t think that anything’s necessarily much clearer now, but it does feel like there’s no more ramping up. It feels like it’s coming the other way and if anything, it seems to be heading more towards de-escalation than escalation,” said City Index market strategist Fiona Cincotta.
However, even with some exemptions in place, there was still not enough clarity over the bigger picture to fully reverse some of the investor flows out of the dollar, which has dropped 4 percent since Trump first announced his “Liberation Day” tariffs on April 2.
“We have seen this pull out of oversold territory. But it’s definitely too early to be cracking open the champagne for the dollar recovery, we’re not quite there yet,” said Cincotta.
The dollar was up 0.67 percent on the day against the yen at 143.555 and was up 0.09 percent against the Swiss franc at 0.827 francs.
The euro fell 0.11 percent to $1.1377, while the pound declined 0.1 percent to $1.3325, even after surprisingly strong UK retail sales figures.
Trump had rocked the dollar at the start of the week, sending it spiralling lower against other major currencies with his threats to fire Federal Reserve Chair Jerome Powell for not cutting interest rates quickly enough. It then jumped back on Tuesday when the president said he never had any intention of replacing the central bank boss.
