US Dollar surged amid trade optimism

12 Mayıs 2025

US Dollar surged amid trade optimism and data anticipation

Today’s markets analysis on behalf of Erkin Kamran – Traze CEO

The US Dollar rallied on Monday, fueled by news of a significant de-escalation in US-China trade tensions. Following talks in Switzerland, both nations agreed to temporarily suspend most reciprocal tariffs on each other’s goods. Chinese tariff rates on US goods will be reduced from 125% to just 10%, while US tariffs on Chinese imports will be brought to 30%. This breakthrough boosted investor sentiment, providing a bullish short-term outlook for the greenback.

Meanwhile, US Treasury yields climbed, with the 10-year note rising above 4.4%, reflecting improved sentiment as investors rotated out of safe-haven assets. Yields reacted to reduced interest rate cut expectations, which could support the dollar.

Looking ahead, all eyes are now on this week’s key economic data releases, including inflation figures and retail sales data, which could further shape expectations for Federal Reserve monetary policy. Softer inflation readings may weigh on the dollar, while stronger-than-expected prints could support more gains.

 

Zaid Barem / ymm