Dollar Rebounds Amid Escalating Tariff Drama

The U.S. dollar recovered against the yen and Swiss franc after President Trump announced a 90-day pause on many tariffs but increased duties on Chinese goods, intensifying trade tensions. Stock markets responded positively, with major indexes rallying while the dollar made gains in the currency market.

The U.S. dollar made a significant recovery against safe-haven currencies such as the yen and Swiss franc, following President Donald Trump's declaration of a 90-day suspension on numerous new tariffs on trading partners. However, in a move that raised tensions, the tariff rate on Chinese goods was hiked to 125%.

Earlier in the session, the dollar had been softening as Trump's 'reciprocal' tariffs took effect, enforcing massive duties on Chinese goods. China swiftly responded with its own tariffs on U.S. products, and the European Union announced countermeasures against American tariffs.

Market analysts, like Karl Schamotta from Corpay, suggest that the 90-day tariff pause could be extended. Meanwhile, U.S. stock markets surged, with significant gains across major indexes, boosting investor sentiment.

(With inputs from agencies.)