Dollar strengthens as trade tensions ease, but falls slightly on lower consumer prices

From Yahoo Finance: 2025-05-13 21:46:00

The U.S. dollar strengthened as investors await further signs of easing global trade tensions. A recent deal between the U.S. and China to cut reciprocal tariffs helped boost the dollar index, but it fell slightly after a report of lower consumer prices. Analysts suggest a weaker dollar environment could benefit trade surplus currencies. Market expectations for U.S. Federal Reserve rate cuts have decreased, with a focus on the September meeting. Major brokerages have revised their U.S. recession forecasts and Fed policy easing views.

Chicago Fed President Austan Goolsbee highlighted that April’s consumer inflation data may not reflect the impact of rising import tariffs. Fed Vice Chair Philip Jefferson noted progress towards the 2% inflation goal but expressed uncertainty due to potential price increases from new import taxes. Sterling weakened, with the Bank of England keeping borrowing costs steady as the labor market outperformed expectations.



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