Dollar sees moderate recovery amid ongoing US-China trade tensions

The dollar barely recovered from steep losses on Tuesday as investors remained uncertain about a de-escalation in trade tensions between China and the US, according to Reuters.

US Treasury Secretary Scott Bessent said China should take the lead in restarting dialogue between the two countries. He emphasized that Beijing must be the first to lower tariffs. These remarks have added to uncertainty about whether negotiations will move forward, the news agency reports.

Despite Donald Trump's assurances of productive talks with Xi Jinping, Beijing denied these claims. The resulting uncertainty put fresh pressure on the dollar, Reuters reports. The greenback plummeted against safe-haven currencies like the yen and the Swiss franc, only partially recovering later.

While seeing some progress in negotiations, analysts suggest a US-China trade deal is unlikely in the near term, with Beijing preparing for an extended trade standoff. However, investor sentiment showed tentative improvement following reports that Washington might ease automotive tariffs, the news agency notes.