Dollar Soars as Trump Eases Fed Tensions, Hints at Progress on China Trade Talks

The U.S. dollar surged across major currencies on Wednesday after President Donald Trump signaled he would not move to fire Federal Reserve Chair Jerome Powell, easing market fears about political interference in monetary policy.After a tense Easter weekend marked by Trump's repeated attacks on Powell for not cutting interest rates, the president appeared to soften his tone. Speaking to reporters in the Oval Office late Tuesday, Trump said, "I have no intention of firing him," while adding he would prefer the Fed to be "a little more active" in lowering rates.The clarification sent the dollar sharply higher in Asian trading. The greenback rose 0.75% against the yen to 142.68 and gained 0.7% against the Swiss franc to 0.8249. The euro fell 0.49% to $1.1363.Earlier this week, the dollar had been under pressure, trading near multi-year lows against the euro and Swiss franc, and the yen had reached a seven-month high as investors reacted to mounting trade tensions and political risks.Sentiment was further buoyed by signs of potential easing in U.S.-China trade frictions. Trump and U.S. Treasury Secretary Scott Bessent suggested that a new trade deal could "substantially" reduce tariffs. Bessent, speaking at a JP Morgan conference, indicated that both Washington and Beijing recognize the unsustainability of the current trade status quo, while Trump hinted that a final agreement would lower, but not eliminate, tariffs on Chinese goods."Trump's apparent U-turn must come as a relief, which has helped support the U.S. dollar on bets he (Powell) won't be replaced with someone more dovish," said Matt Simpson, senior market analyst at City Index.However, Simpson added that the broader story remains U.S.-China trade, as future tariff developments will be critical to the U.S. economic outlook and interest rate policy.Chris Weston, head of research at Pepperstone, noted, "Markets have become conditioned to the president’s impulsive comments and subsequent reversals. His stance on Powell should help ease fears of a major policy misstep."Elsewhere in the currency markets, sterling dipped 0.39% to $1.3281. The Australian dollar gained 0.3% to $0.6385, and the New Zealand dollar rose 0.11% to $0.5970.In the cryptocurrency sector, bitcoin rallied 2.7% to $93,671.97, breaching the $90,000 level for the first time since March.

The U.S. dollar surged across major currencies on Wednesday after President Donald Trump signaled he would not move to fire Federal Reserve Chair Jerome Powell, easing market fears about political interference in monetary policy.

After a tense Easter weekend marked by Trump's repeated attacks on Powell for not cutting interest rates, the president appeared to soften his tone. Speaking to reporters in the Oval Office late Tuesday, Trump said, "I have no intention of firing him," while adding he would prefer the Fed to be "a little more active" in lowering rates. The clarification sent the dollar sharply higher in Asian trading.

The greenback rose 0.75% against the yen to 142.68 and gained 0.

7% against the Swiss franc to 0.8249. The euro fell 0.

49% to $1.1363. Earlier this week, the dollar had been under pressure, trading near multi-year lows against the euro and Swiss franc, and the yen had reached a seven-month high as investors reacted to mounting trade tensions and political risks.

Sentiment was further buoyed by signs of potential easing in U.S.-China trade frictions.

Trump and U.S. Treasury Secretary Scott Bessent suggested that a new trade deal could "substantially" reduce tariffs.

Bessent, speaking at a JP Morgan conference, indicated that both Washington and Beijing recognize the unsustainability of the current trade status quo, while Trump hinted that a final agreement would lower, but not eliminate, tariffs on Chinese goods. "Trump's apparent U-turn must come as a relief, which has helped support the U.S.

dollar on bets he (Powell) won't be replaced with someone more dovish," said Matt Simpson, senior market analyst at City Index. However, Simpson added that the broader story remains U.S.

-China trade, as future tariff developments will be critical to the U.S. economic outlook and interest rate policy.

Chris Weston, head of research at Pepperstone, noted, "Markets have become conditioned to the president’s impulsive comments and subsequent reversals. His stance on Powell should help ease fears of a major policy misstep." Elsewhere in the currency markets, sterling dipped 0.

39% to $1.3281. The Australian dollar gained 0.

3% to $0.6385, and the New Zealand dollar rose 0.11% to $0.

5970. In the cryptocurrency sector, bitcoin rallied 2.7% to $93,671.

97, breaching the $90,000 level for the first time since March. Follow Emirates 24|7 on.