The U.S. dollar opened the week on a weaker note, extending the selling pressure that has dominated the market since the end of last week. Investors held on to expectations that Washington might step back from its recent escalation in trade tensions with Beijing, especially after President Trump hinted at a softer stance following his earlier announcement of 100% tariffs on Chinese goods. This slight decline reflected a state of caution and anticipation among traders rather than a clear market direction.
Trump’s attempt to calm concerns through a post on Truth Social, in which he emphasized that the United States does not seek to harm China, was viewed by market participants as more of a tactical retreat in rhetoric than a fundamental policy shift. Although his comments helped ease some of the tension, they were not enough to fully restore confidence to the markets particularly after the turmoil seen in equities and cryptocurrencies last Friday.
U.S. stock futures started the week sharply higher following the previous sell-off, supported by Trump’s more measured tone toward trade relations with China. Dow Jones futures rose by around 1%, S&P 500 gained 1.5%, and Nasdaq 100 advanced 1.9%, signaling a partial return of risk appetite, though overall sentiment remained cautious.
Chinese trade data showed exports rising by 8.3% in September, beating expectations and highlighting the resilience of China’s economy amid U.S. trade measures. However, analysts warned that the sustainability of this performance depends largely on how committed Washington and Beijing are to de-escalation. Should Trump follow through on his threat of imposing “triple-digit tariffs,” it could reignite pressure on global growth and disrupt supply chains.
In currency markets, the euro held steady near $1.1620, while the dollar strengthened against the yen to around ¥151.90, as investors monitored political developments in Japan following the withdrawal of the Komeito party from the ruling coalition. Meanwhile, in safe-haven assets, gold climbed to a new record high of $4,068 per ounce, supported by strong demand for hedging, while cryptocurrencies remained volatile after last week’s sharp liquidation that erased more than $19 billion in long positions.
Across Asia, improved Chinese export data helped lift the yuan against the dollar, while the Australian and New Zealand dollars benefited from improved risk sentiment. Still, the broader market picture remains fragile, with investors awaiting the next move from either Washington or Beijing that could shape the coming trading sessions. Overall, the dollar continues to trade within a narrow range, caught between conflicting political and economic forces, while gold remains the biggest beneficiary of global uncertainty.
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