The U.S. dollar traded flat against most major currencies on Wednesday as investors focused on trade talks between the United States and China, along with a wave of economic data due later this week.
President Donald Trump has set a Wednesday deadline for countries to present new trade offers, coinciding with the start of higher tariffs on imported steel and aluminum. The White House also said Trump may speak with Chinese President Xi Jinping this week.
Tensions rose after both sides accused each other of breaking a previous agreement to reduce tariffs. Trump wrote on his social media platform that Xi was “tough” and “hard to make a deal with,” adding to market uncertainty.
The dollar index, which tracks the greenback against six major currencies, was little changed at 99.194, close to its lowest level since late April. The euro rose 0.12% to $1.1384 ahead of the European Central Bank’s interest rate decision on Thursday. Sterling remained steady at $1.3552, as the UK is not affected by the new U.S. metal tariffs.
The Swiss franc gained 0.1% to 0.8233 per dollar. Meanwhile, the Japanese yen fell 0.14% to 144.155 as traders watched signs the Bank of Japan may slow its bond-buying program starting next fiscal year. Longer-dated Japanese bond yields edged slightly higher.
In Canada, the dollar stayed flat at C$1.3710 ahead of a Bank of Canada interest rate decision. Mexico’s peso was also steady, with both countries facing increased U.S. tariffs on industrial metals.
South Korea’s won gained nearly 1% to 1,363.92 per dollar after liberal candidate Lee Jae-myung won the country’s presidential election. Hong Kong’s dollar held steady at 7.8465, near the weak end of its official trading band.
Investors are also watching economic reports this week for signs of how the U.S. economy is holding up. The ISM services sector report and ADP employment data are due soon, followed by the U.S. government’s monthly payrolls report on Friday.
In Europe, business activity remained stable in May, and upcoming ECB rate cuts and possible government spending may influence future growth.
