Dollar Stays Steady Amid Economic Uncertainty and Trade Negotiations

The dollar maintained stability amid anticipation over U.S. trade policies and upcoming economic data. Despite recent fluctuations against the euro and yen, a potential easing in U.S.-China trade tensions offers hope. Investors await U.S. jobs data to assess tariffs' impact, while the Fed remains cautious on rate changes.

The dollar held its ground on Monday, as market participants cautiously observed developments in U.S. trade policies and prepared for a slew of economic data expected to provide insights into the impact of President Donald Trump's trade war. Trading at 143.69 yen and $1.1325 per euro, the dollar has stabilized, despite being on course for its largest monthly decline in two-and-a-half years due to shaken confidence in U.S. assets' reliability.

The dollar has fallen over 4% against both the euro and yen throughout April but rebounded late last week amid an apparent softening in U.S.-China relations. Conversations between the two sides last week hinted at a potential easing of tariffs, although there was no confirmation of ongoing negotiations from Beijing, and Treasury Secretary Scott Bessent declined to comment on any progress during a Sunday interview.

Investors are keenly awaiting April's U.S. jobs data scheduled for Friday, hoping to gauge the effects of tariffs on the job market. Federal Reserve officials, including Chair Jerome Powell, expressed openness to adjusting rates if growth risks become evident, though they remain cautious, preferring concrete evidence of tariffs' impact before acting. Beyond the U.S., Canada's election and Japan's monetary policy decisions are also on the radar for financial markets this week.

(With inputs from agencies.)