Dollar Surges as Trade Deals Spark Optimism

The dollar headed for a weekly gain against major currencies, bolstered by U.S.-UK trade deal optimism and receding Fed rate cut bets. Financial markets are focused on U.S.-China talks. The euro and yen weakened, while the sterling dipped as initial U.S.-UK trade agreement offers modest benefits.

The dollar surged this week, gaining strength against most major currencies as optimism grew over a recently announced U.S.-UK trade deal. The trade agreement raised hopes for progress in upcoming U.S.-China negotiations, and the Federal Reserve's signals that it is in no rush to cut rates further propelled the dollar's rise.

Financial markets are closely monitoring trade talks between the United States and China, set to begin this weekend in Switzerland. Meanwhile, the euro has slipped to a one-month low, the yen weakened, and sterling fell following revelations of the limited scope of the U.S.-UK trade agreement.

Market analysts like Steve Englander at Standard Chartered suggest that the expansions in agricultural access and reductions in U.S. duties on British car exports could signal the feasibility of such tariff deals moving forward, potentially easing global trade tensions.

(With inputs from agencies.)