Singapore: The U.S. dollar showed signs of stabilization on Monday following a turbulent session caused by renewed trade tensions with China. Investors, wary of Washington’s aggressive tariff announcements over the past week, found reassurance in U.S. President Donald Trump’s recent remarks that appeared to soften his stance on Beijing. The dollar index, which tracks the greenback against a basket of six major currencies, settled at 98.908, slightly down from Friday but reflecting a calming of initial market jitters.
Friday’s market upheaval was triggered by Trump’s declaration of 100% tariffs on Chinese imports, recalling the dramatic impact of his previous tariff announcements. The abrupt escalation had led to a sharp selloff in stocks and cryptocurrencies, creating nervous conditions in global markets. Analysts attributed the recent rebound to Trump’s follow-up statements on social media, assuring that his administration seeks cooperative relations with China rather than economic confrontation.
Meanwhile, political developments in Europe and Asia influenced other major currencies. In France, the euro remained stable at $1.1622 after President Sebastien Lecornu announced his new cabinet, retaining Finance Minister Roland Lescure, a key Macron ally. In Japan, the yen weakened to 151.89 per dollar following the Komeito party’s exit from the ruling coalition, complicating Liberal Democratic Party leader Sanae Takaichi’s ambitions to become the country’s first female prime minister.
Cryptocurrency and precious metal markets mirrored global uncertainty. Bitcoin traded slightly lower at $114,849.14, while gold reached a record $4,068 an ounce amid safe-haven demand. Silver also gained traction, supported by investor interest and limited market supply.
Asian currencies reacted modestly, with the offshore yuan gaining 0.2% to 7.1357 per dollar after China reported increased export growth in September. The Australian and New Zealand dollars appreciated to $0.6525 and $0.5735, respectively, while the British pound strengthened slightly to $1.3347.
Experts emphasized that future market direction depends heavily on the interplay between U.S.-China trade policies and political developments in major economies. “Both superpowers understand that escalating tensions too far would be detrimental,” noted Vasu Menon, managing director at OCBC. “Reasoned economic policy is likely to prevail over political posturing in the coming weeks.”
Global investors remain alert, balancing the optimism from political reassurances with caution over potential volatility as markets navigate an increasingly complex geopolitical landscape.