Dollar Rebounds as U.S.–China Trade Fears Ease, Aussie Slides

The U.S. dollar strengthened Tuesday as investor fears of a renewed U.S.–China trade conflict receded. Safe-haven currencies like the yen and Swiss franc gained ground.

Australia’s dollar fell about 1%, reacting to China’s economic ties. Earlier threats of 100% tariffs on Chinese goods had unsettled markets. But muted responses and de-escalatory signals helped bring relief.

Tensions aren’t gone. The U.S. and China have both introduced new port fees and countermeasures affecting trade with South Korea. Still, many traders see Tuesday’s dollar rise as a short-lived rebound.

Meanwhile, the euro and British pound posted mixed performance. The pound drew pressure after weak U.K. wage and employment data. Cryptos were hit hard: Bitcoin dropped 3.5%, Ether 7.6%.

Analysts warn the dollar’s rally may be fragile. Markets remain hypersensitive to any new tariff or geopolitical headlines.