The US dollar remained weak in trading on Tuesday with uncertainty continuing to engulf the market from the opening earlier this week, while investors are cautiously awaiting the latest FOMC meeting.
However, there was a recovery in the currency in the Asian session this morning (Wednesday) when there were new signals in the development of the global tariff war.
President Donald Trump signaled that he would deliver an important announcement in the near future and the market expects it to be related to trade negotiations with China.
US Treasury Secretary Scott Bessent announced a meeting with Chinese officials this week.
China's Ministry of Commerce has also expressed its willingness to negotiate with the US, but stressed that negotiations must be fair and beneficial to both parties.
Investors can expect the US dollar to recover for several sessions, but should remain wary of uncertainty ahead of the FOMC meeting.
The meeting results are awaited with the Federal Reserve (Fed) forecasting interest rates to be maintained at 4.50%.
However, with signs of dismal US economic growth in the first quarter of 2025 and continued pressure from Trump, interest rate cuts are also becoming the central bank's option.
Follow-up comments by Fed Chairman Jerome Powell are expected to impact market movements with indications of the central bank's further monetary policy direction.
