Dollar Dips Amid U.S.-China Trade Tensions

The dollar experienced a decline as optimism faded over U.S.-China trade negotiation prospects. Investor sentiment turned negative following a temporary rally sparked by President Trump's eased stance on the Fed Chair and China. The yen, Swiss franc, and pound strengthened against the dollar amidst ongoing trade uncertainties.

The international currency markets witnessed a notable shift on Thursday as the dollar faced a downturn. Investors were dismayed by the stagnation in U.S.-China trade talks, undoing the previous day's brief optimism surge after President Trump softened his rhetoric regarding the Federal Reserve and trade policies with China.

Earlier sentiments of relief provided by Treasury Secretary Scott Bessent's remarks and Trump's easing stance were short-lived. By Thursday, China's call for the U.S. to lift tariffs underscored the persistent trade tensions, lowering the dollar's value as global currencies like the yen rallied.

Economists, including Jan Hatzuis from Goldman Sachs, predict continued dollar depreciation unless there are changes in U.S. trade strategies and interest rate policies. The Swiss franc showed strength due to safe-haven flows, while the pound and meme currencies like $TRUMP exhibited contrasting movements, highlighting market volatility amid geopolitical uncertainties.

(With inputs from agencies.)