- The US Dollar Index Gains Momentum Amid Signs of Reduced US-China Tensions.
- Yields on the US 2-year and 10-year Treasury notes stay muted, currently hovering around 3.75% and 4.24%, respectively.
- The Federal Reserve continues its communication blackout ahead of the May 7 FOMC meeting.
DXY Extends Winning Streak into Second Day
The US Dollar Index (DXY), which measures the greenback’s performance against a basket of six major currencies, is on the rise for the second straight session. During early Asian trading hours on Monday, the index hovers close to 99.60. The USD continues to gain ground, supported by renewed optimism surrounding US-China trade relations.
Mixed Signals from US-China Trade Developments
Late last week, China announced tariff exemptions on select American imports, sparking hopes that the prolonged trade dispute between the two largest global economies could be drawing to a close. Despite this optimism, a spokesperson from the Chinese embassy, cited by Reuters, firmly dismissed the possibility of active tariff negotiations, stating, “China and the US are not having any consultation or negotiation on tariffs.” The spokesperson further urged the United States to “stop creating confusion.”
Treasury Yields Remain Subdued Ahead of Key US Data
On Monday, US Treasury yields remained soft, with the two-year note yielding around 3.75% and the 10-year note at approximately 4.24%. Investors appear cautious as they await a series of crucial economic releases later this week, which may offer the first insights into the effects of President Donald Trump’s tariffs.
US Officials Hint at Ongoing Dialogue
In an interview with Reuters on Sunday, US Agriculture Secretary Brooke Rollins indicated that the Trump administration is engaged in daily discussions with Chinese officials concerning tariff issues. Rollins also mentioned that trade deals with other countries are progressing and are “very close” to completion.
Markets Eye Key Economic Reports and Fed Policy Cues
With the Federal Reserve currently in its pre-meeting blackout period ahead of the May 7 Federal Open Market Committee (FOMC) gathering, traders are shifting their attention to upcoming US economic data. Scheduled releases include the preliminary Q1 GDP figures, March PCE inflation data, and April employment numbers. These reports are likely to provide fresh clues about the Fed’s policy outlook and the broader economic landscape.
US Dollar PRICE
The table below displays today’s percentage changes of the US Dollar (USD) against major currencies, with the USD showing the strongest performance against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.02% | 0.08% | -0.09% | 0.01% | 0.07% | -0.07% | -0.18% | |
| EUR | -0.02% | 0.00% | -0.11% | -0.02% | -0.05% | -0.10% | -0.22% | |
| GBP | -0.08% | -0.01% | -0.13% | -0.01% | -0.08% | -0.11% | -0.21% | |
| JPY | 0.09% | 0.11% | 0.13% | 0.15% | 0.20% | -1.37% | 0.18% | |
| CAD | -0.01% | 0.02% | 0.01% | -0.15% | -0.07% | -0.09% | -0.18% | |
| AUD | -0.07% | 0.05% | 0.08% | -0.20% | 0.07% | -0.04% | -0.15% | |
| NZD | 0.07% | 0.10% | 0.11% | 1.37% | 0.09% | 0.04% | -0.10% | |
| CHF | 0.18% | 0.22% | 0.21% | -0.18% | 0.18% | 0.15% | 0.10% |
