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Dollar Rebounds After Washington-Beijing Trade Escalation
The US dollar rose significantly in trading on Monday, October 13, supported by a softening of US President Donald Trump's escalating rhetoric regarding the trade war with China. This contributed to calming markets after a broad sell-off at the end of last week.
According to trading data, the dollar rose 0.78% against the Swiss franc, reaching 0.805 francs, recovering from the previous session's losses that came after Trump announced 100% tariffs on Chinese imports. The dollar index, which measures the performance of the US currency against a basket of six major currencies, also rose 0.27% to 99.32.
Trump's Statements Calm Markets
In a post on the Truth Social platform, Trump said: "Don't worry about China. Things will be just fine... President Xi doesn't want a recession for his country, and neither do I. The United States wants to help China, not hurt it." These statements eased the tensions sparked by Friday's tariff announcement, which recalled similar decisions last April that caused widespread market turmoil.
US Treasury Secretary Scott Besant also expressed confidence in the possibility of calming the trade standoff between the two countries, which contributed to paring some of the dollar's gains during the session.
In Europe, markets largely ignored the announcement of the formation of the new French government under Prime Minister Sébastien Lecornu, with the reappointment of Roland Lescure as Finance Minister. The euro fell 0.43% to $1.1564, reversing gains from the previous session.
In Japan, the yen fell 0.81% against the dollar to 152.36 yen, amid thin trading due to a public holiday. Markets are closely monitoring the fate of the new leader of the Liberal Democratic Party, Sanae Takaichi, after the Komeito party withdrew from the ruling coalition, weakening her chances of becoming Japan's first female prime minister.
