FX.co ★ Dollar Holds Firm as Trade Tensions Ease

The dollar index remained above 99.2 on Tuesday, following its gains in the preceding session. This increase was buoyed by easing tensions between the US and China, with both nations signalling readiness to restart trade talks ahead of a potential meeting between President Donald Trump and Chinese President Xi Jinping later this month. Previously, on Friday, Trump had threatened to impose substantial tariffs on Chinese imports in retaliation for China's new export controls on rare earth minerals. However, he later adopted a more conciliatory stance, suggesting that trade relations would ultimately improve. Concurrently, the ongoing US government shutdown has curtailed the release of economic data, prompting investors to focus on the upcoming earnings reports from major banks for insights into the economic environment. The US dollar maintained its strength against most major currencies and gained ground against the yen amidst increased political uncertainty in Japan.