Dollar's Momentary Respite Amid Trade Talks and Policy Shifts

The dollar paused its rally as President Trump's administration signaled a softer approach to China tariffs. Treasury Secretary Scott Bessent clarified the absence of a specific currency target, while Francesco Pesole pointed to ongoing risk factors for the dollar. Global currencies showed varied responses.

The dollar paused its ascent on Thursday after President Trump signaled a potential softening of his administration's stance on China tariffs and backed away from calls to fire Federal Reserve Chair Jerome Powell.

Treasury Secretary Scott Bessent noted no specific currency target is set for upcoming talks with Japan, stressing ongoing negotiations over high U.S.-China tariffs.

Analysts such as ING's Francesco Pesole see risks for the dollar, but note global currencies like the euro and Australian dollar are responding variably to the situation.

(With inputs from agencies.)