The US dollar rose in Asian trading on Tuesday, driven by renewed optimism around potential trade agreements that could avert President Donald Trump’s sweeping tariffs, even as global markets await the Federal Reserve’s latest policy decision.
Although no final deals have been announced, investor sentiment improved after US Treasury Secretary Scott Bessent revealed that 17 countries had submitted promising trade proposals, with expectations for “substantial progress” in talks with China, which has been hit hardest by Trump’s 145% tariff hike.
The greenback gained against several Asian currencies, though it held steady versus the yen, euro, and pound. Taiwan’s dollar led regional gains, appreciating by around 7% this month, with the Korean won, Indian rupee, and Thai baht also making strong advances. Analysts suggest this may reflect intentional currency appreciation by some countries as a negotiation tactic.
“If these Asian nations are indeed opting for a currency revaluation, it could be a significant development not just in driving the dollar lower, but also in the trade negotiation process,” said Chris Weston of Pepperstone.
Meanwhile, equities were mixed across global markets. Hong Kong’s Hang Seng and Shanghai Composite posted gains after a long weekend, along with London, Singapore, and Manila. In contrast, Sydney, Paris, Frankfurt, and Mumbai edged lower. Traders shrugged off Wall Street’s modest retreat, with the S&P 500 snapping a nine-day winning streak, pressured by Trump’s threat of tariffs on foreign-made films.
All eyes now turn to the Federal Reserve, which is expected to maintain interest rates at Wednesday’s meeting. While Q1 data showed the US economy contracted, strong jobs and services numbers have tempered expectations for near-term rate cuts.
“Soft data had baked in a Fed pivot, but the ensuing hard data prints got bond desks slashing their rate-cut tickets,” said Stephen Innes of SPI Asset Management.
In commodities, oil prices rebounded more than 2%, recovering from losses triggered by a surprise OPEC+ production hike of 411,000 barrels per day for June. The increase, led by Saudi Arabia and Russia, came amid ongoing demand concerns and global economic uncertainty.
Key figures as of 08:10 GMT:
Hong Kong – Hang Seng Index: +0.7% at 22,662.71
Shanghai – Composite Index: +1.1% at 3,316.11
London – FTSE 100: +0.2% at 8,617.32
Euro/Dollar: $1.1344 (up from $1.1319)
Pound/Dollar: $1.3327 (up from $1.3296)
Dollar/Yen: 143.25 yen (down from 143.72)
WTI Crude: +2.3% at $58.43
Brent Crude: +2.3% at $61.59
Dow Jones Industrial Average: +0.2% at 41,218.83
