FX.co ★ Dollar Strengthens as US-China Trade Talks Fuel Optimism

The US dollar index climbed above 99.2 on Tuesday, offsetting declines from the previous session as market participants concentrated on the ongoing trade negotiations between the US and China occurring in London. Treasury Secretary Scott Bessent, alongside other high-ranking officials, engaged in discussions on Monday with Chinese counterparts regarding rare earth shipments and the possibility of relaxing export restrictions. Additional talks are anticipated on Tuesday. Optimism for a tariff resolution between the two largest global economies bolstered the dollar, which has been under pressure this year due to President Donald Trump's trade policies that negatively impacted investor confidence in US assets. Investors are also keenly awaiting key Consumer Price Index (CPI) and Producer Price Index (PPI) data later this week, as these reports are expected to shed more light on inflation trends and the economic consequences of the ongoing trade tensions. The US dollar broadly surged, with significant gains observed against the Japanese yen, euro, and British pound.