The US dollar fell in European trade on Thursday against a basket of major rivals, resuming losses after a two-day hiatus and approaching three-month lows once more under pressure from US-China trade war concerns.

Trade tensions remain between both sides amid mixed signals from US President Donald Trump on his plans for the China tariffs.

The Index

The dollar index fell 0.55% today to 99.25, with a session-high at 99.84.

On Wednesday, the index rose 0.7%, the second profit in a row away from three-year lows at 97.92.

The index also rose after positive remarks by Trump on China and Jerome Powell.

Mixed Signals

Trump asserted the US goal of reaching a fair trade deal with China, however, he once more threatened new tariffs on Beijing if no deal is reached.

US Treasury Secretary Scott Bessent said Trump didnt propose to unilaterally remove tariffs from China, asserting the US will not cut tariffs on China by over 100%.

Bessent said theres no clear timeline for communications between both sides, with the process of complete trade rebalancing potentially taking two or three years.

The markets are beginning to see the Trumps administrations sensitivity towards the performance of the financial markets, with decisions such pausing reciprocal tariffs and backing off plans to sack Fed Chair Powell as reflections of such considerations.

US Rates

Chicago Fed President Austin Goolsbey said he hopes the US wont turn into an environment where the Feds ability to set monetary policies independently from political pressure is undermined.

According to the Fedwatch tool, the odds of a May Fed 0.25% rate cut stood at 7%.

The odds of such a cut in June stood at 62%.

Do you need help in trading decisions? Do you want to learn how to start trading?

Join Economies.com VIP Club and benefit from over 15 years of market analysis expertise and get:

Full coverage of commodities such as gold, oil, silver, and more Full coverage of all major forex currency pairs Full coverage of key global indices and stocks Full coverage of major cryptocurrencies and meme coins Accurate analysis and daily updated price forecasts Exclusive and breaking news Reliable trading ranges for effective risk management Comprehensive educational materials, competitions and prizes! Innovative tools to enhance your trading performance Special Offer: Subscribe to the Economies.com VIP channel and get also a free subscription to a trusted trading signals channel provided by Best Trading Signal.

Join Economies.com VIP Club