FX.co ★ Dollar Gains as Trump Reignites Hopes for US-China Trade Talks

The U.S. dollar index rose above 99.5 on Friday, rebounding from the previous day's decline, following President Trump's confirmation that trade talks with China are still in progress, despite denials from Beijing. The dollar gained additional support due to indications of advancement in trade discussions with Japan and South Korea. Earlier in the week, Treasury Secretary Bessent highlighted the necessity of significantly reducing tariffs between the U.S. and China to facilitate substantial negotiations, emphasizing the importance of easing tensions between the world's two largest economies. Additionally, President Trump moderated his stance on Federal Reserve Chair Powell, clarifying that he never intended to replace him, which helped alleviate investor uncertainty regarding central bank leadership. Meanwhile, Cleveland Fed President Beth Hammack indicated the possibility of a rate cut as early as June, contingent on economic data, a statement that briefly exerted downward pressure on the dollar before it recovered due to optimism surrounding trade developments.