On May 12, 2025, the U.S. dollar strengthened against safe-haven currencies such as the Japanese yen and Swiss franc, following a U.S.-China agreement to reduce reciprocal tariffs during a 90-day hiatus. This development eased market fears of a damaging trade war between the world’s two largest economies. The greenback rose 1.7% to 147.835 yen and 1.5% to 0.84405 Swiss francs.
The dollar index reached a one-month high, indicating a broader recovery in U.S. assets. Market attention is now turning to upcoming U.S. economic data, including the Consumer Price Index and retail sales, to gauge the impact of the trade agreement on the economy and Federal Reserve policy.
Risk-sensitive currencies like the Australian and New Zealand dollars also advanced, with the New Zealand dollar gaining about 0.2%. China’s offshore yuan appreciated by approximately 0.2%, reflecting improved investor sentiment.
Analysts view the progress in U.S.-China negotiations as a positive sign that may pave the way for similar agreements with other Asian nations, potentially stabilizing global trade dynamics.
Source: Reuters
