FX.co ★ Dollar Rises on US-China Trade Talk Optimism

The US dollar index rose above 99.5 on Wednesday, ending a three-day decline after reports indicated that US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer would engage in talks with their Chinese counterparts in Switzerland this week to address economic and trade issues. This fueled optimism about the possibility of initiating trade negotiations aimed at reducing the significant tariffs levied by both nations. Meanwhile, investors are preparing for the upcoming Federal Reserve policy announcement, where the expectation is that interest rates will remain steady. Market participants will be closely watching Fed Chair Jerome Powell's remarks for any indications regarding future rate adjustments amid growing political pressure for policy easing. Nonetheless, concerns persist that President Trump's tariffs could drive inflation higher, casting a shadow over the economic outlook. The dollar gained strength across various currencies, notably appreciating the most against the euro, yen, and South Korean won.