USD rises strongly thanks to positive signals from US-China trade negotiations

Illustration photo. Photo: Internet

The greenback gained ground in Asian trade on Thursday morning after the world's two largest economies made "significant progress" in talks over the weekend, according to US Treasury Secretary Scott Bessent.

At the end of two days of work in Geneva, Switzerland, Mr. Bessent and US Trade Representative Jamieson Greer said the two sides had reached an agreement to narrow the trade deficit between the US and China.

Although the details of the agreement have not been disclosed, both the US and China have pledged to issue a joint statement on May 12. Chinese Vice Premier He Lifeng described the negotiations as “frank, in-depth and constructive.”

Currency markets reacted strongly to the positive announcements. The US dollar index, which measures the strength of the greenback against a basket of six major currencies, rose 0.2% in Asia. The greenback also gained 0.3% against the Japanese yen, reaching 145.85 JPY/USD. Meanwhile, the euro fell 0.2% to 1.1226 USD/USD. Riskier currencies such as the New Zealand dollar and the Australian dollar also recovered, rising 0.2% and 0.19%, respectively.

In contrast, gold prices, considered a safe haven asset in times of uncertainty, fell 1.3% to $3,281.29 an ounce in Singapore trading. The move came after gold rose 2.6% last week, reflecting a shift in investor sentiment as US-China trade tensions showed signs of easing.

Gold prices have risen 25% since the start of 2025, hitting an all-time high of nearly $3,500 an ounce last month as President Donald Trump’s tough tariff policies stoked fears of a full-blown trade war. However, a softer stance from Washington could dampen demand for safe-haven assets like gold.

Global markets were also boosted by a series of other positive signs. India and Pakistan declared a ceasefire after four days of intense fighting, while Ukrainian President Volodymyr Zelensky expressed his willingness to meet Russian President Vladimir Putin in Türkiye on May 15, marking the first face-to-face meeting since the conflict broke out in early 2022.

Still, gold has been supported by strong buying from central banks and individual investors in China, which is trying to diversify its reserves and reduce global financial risks.

This week, the market continues to monitor the US Consumer Price Index (CPI) and retail sales reports, which are expected to provide a clearer view of the economic impact from recent trade tensions.

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Source: https://doanhnghiepvn.vn/kinh-te/dong-usd-tang-manh-nho-tin-hieu-tich-cuc-tu-dam-phan-thuong-mai-my-trung/20250512083355195