Dollar Strengthens as U.S.–China Tariff Truce Sparks FX Rally

The U.S. dollar jumped sharply on Monday after Washington and Beijing agreed to temporarily reduce their reciprocal tariffs, alleviating fears of a prolonged trade war and bolstering confidence in U.S. assets.

Tariff Rollbacks and Dollar Gains

• U.S. tariffs on Chinese goods cut from 145% to 30%

• Chinese duties on U.S. imports lowered from 125% to 10%

• Dollar Index rose 1% to a one-month high, reversing much of its April decline

Investors cheered faster-than-anticipated action on tariff reductions. “Trump has toned down his tariffs faster than anyone thought he could,” said Arne Petimezas of AFS Group, noting the move makes levies “more manageable, albeit temporarily.”

Currency Movements

The dollar's advance came at the expense of traditional safe-haven currencies:

• USD/JPY surged 2% to 147.835

• USD/CHF climbed 1.7% to 0.845

• EUR/USD tumbled 1.3% to 1.1097, on track for its largest one-day drop this year

• GBP/USD fell 1% to 1.3185

Senior strategist Kenneth Broux of Société Générale suggests these moves may herald “a deeper adjustment and a bigger recovery of the dollar to catch up with U.S. equities and bond yields.”

Monitoring Ongoing FX Trends

As trade negotiations evolve, keeping tabs on currency fluctuations is critical for exporters, importers, and global investors. You can track daily exchange-rate movements and historical trends via the Forex Daily API, which provides up-to-the-minute data on major currency pairs.