Both the US dollar and the yuan stabilized on Wednesday after progress in the US-China trade talks in London, paving the way for calming the recent trade war.
The US and China reached a trade framework in London after two days of intensive negotiations, with representatives waiting for the final approval of Trump and Xi Jinping to move forward.
This progress comes after an important deal reached in mid May, which stopped the enforcement of most tariffs for 90 days.
Limited Movements for Global Currencies
The US dollar edged up 0.7% against the dollar following the news to $1.141, while the yen stabilized at 144.91.
The yuan was little changed as well at 7.1873.
Ongoing Concerns
Despite the deal, analysts caution that tariffs remain much higher than their levels last year, and remain a burden on the global economy.
Investors are clearly losing confidence in US assets, with the dollar losing over 8% of its value since the start of the year.
Focus on UK Spending Plans
Markets are focusing on the UK Government’s distribution of over 2 trillion pounds of government spending between 2026 and 2029.
The pound shed 0.1% to $1.3483.
Markets will analyse the new US inflation data released today to gauge the likelihood of future Fed rate cuts.
They’re also closely monitoring an auction of US 10-year treasury yields worth $39 billion to gauge investor interest in US debt.
Risky-linked assets lost ground today, with the Australian dollar down 0.25% to $0.6505, while the New Zealand dollar shed 0.33% to $0.6033.
