The dollar barely recovered its heavy losses on Tuesday, investors still not knowing if a appeasement of the Sino-American trade war was underway, the secretary of the Treasury Scott Bessent having hinted that it was up to China to start the negotiations.
Bessent said in an interview on Monday that it was up to China to defuse tension on customs duties, the latest contradictory signal concerning the progress of commercial negotiations between the two largest world economies.
While Mr. Trump insists that progress has been made and he spoke with Chinese President Xi Jinping, Beijing denied these statements.
This confusion only gave investors an additional reason to sell the dollar, which has dropped sharply against the Yen and the Swiss franc, two shelters, during the previous session.
The American currency finally appreciated 0.11 % to 142.19 yen, barely reversing its decrease by 1.2 %, and increased by 0.18 % against the Swiss franc to 0.8217, after deciding 0.8 % on Monday.
The feeling was slightly supported by the announcement that the administration of US President Donald Trump was going to take action on Tuesday to reduce the impact of his customs duties on cars.
“Given the contradictory signals, I think that an agreement is very improbable in the short term and that China could prepare for an prolonged trade war,” said Carol Kong, a currency strategist at the Commonwealth Bank of Australia (CBA).
“Overall, the American tariff policy is very chaotic and the markets really do not appreciate this, but there is indeed an increasing optimism as to the end of the worst of the trade war. »»
Despite the few signs of progress in the trade negotiations between the United States and China, the two parties seem to have relaxed their positions in recent days, the Trump administration being open to a reduction in customs duties and China exempting certain American imports from its 125 %taxes.
The euro fell 0.15 % to $ 1.1404, but remains on the way to register its highest monthly increase against the dollar for almost 15 years, investors fleeing American assets and looking for alternatives in Europe.
The Sterling book has maintained near its highest level in three years, exchanging at 1.3427 dollars. Faced with a basket of currencies, the dollar stabilized at 99.079, after deciding 0.6 % during the previous session.
Investors were also preparing for a week rich in American economic data, which could give a first indication of the impact of the trade war waged by Trump.
The Friday employment report will be decisive for the markets, which also await preliminary growth figures in the first quarter and data on the basic PCE index, the inflation indicator favored by the federal reserve.
“I think that American economic data will certainly deteriorate more from now on,” said Kong, of the CBA.
“When concrete data is published, I think they will weigh more on the US dollar, because for the moment, I think investors consider the US dollar as a less reliable refuge currency. In fact, I think it is more negotiated as a risky currency. »»
In Canada, the Canadian dollar has practically unchanged at 1.3837 US dollar, awaiting the results of the general elections on Monday, where Mr. Trump’s customs duties and his reflections on the annexation of Canada were at the center of the debates.
The Australian dollar fell 0.02 % to $ 0.6431, while the New Zealand dollar dropped 0.27 % to 0.59635 dollar. (Rae weekend report, edited by Shri Navaratnam)
