The US dollar continued to strengthen in trading on Tuesday, but the momentum was seen to be slower than in the early sessions at the beginning of the week.
The US dollar has reached a 1-month high following the success of the United States (US) negotiation agreement with several of its trading partners, most recently over the weekend, with the European Union (EU).
The agreement with Japan is to reduce tariffs from 15% to 25% and $550 billion in investments to America, while with the EU, tariffs of 30% are reduced to 15% on European investments worth $600 billion.
While the 2-day talks between US and Chinese officials in Stockholm that ended yesterday did not show any progress in the negotiations, both sides agreed to extend the tariff suspension period for another 90 days.
Analysts assess that the US dollar is now showing a short-term recovery pattern, after experiencing a significant drop in value in the first half of 2025 trading.
After 6 consecutive months of showing a decline pattern, July became the first month of positive performance for the US dollar.
Investors expect major turmoil to hit the US dollar this week with focus on critical economic data for the US.
Limiting the strengthening of the US dollar when the number of jobs in the US for June was lower in the JOLTS report published in the New York session yesterday.
Coming up today (Wednesday) is the ADP employment data and also the US economic growth reading for the second quarter of 2025.
Next, early Thursday morning, the results of the FOMC meeting will be watched with a follow-up statement by Federal Reserve (Fed) Chairman Jerome Powell will be an important indicator.
At the end of this week, the NFP employment data report will provide an assessment of the health of the labor sector in the US.
