USD extends gains post Trump–Xi summit and FOMC – OCBC

FXStreet Insights Team FXStreet

US Dollar (USD) extended its rise in what looked like 'buy rumor, sell the fact' post-Trump-Xi meeting and FOMC, while there were market chatters of month-end USD demand, OCBC's FX analysts Frances Cheung and Christopher Wong note.

US–China agree to one-year trade truce, resume TikTok deal

On Trump-Xi summit, both sides reach an agreement. Some highlights include trade truce being extended for another year; China will restart buying 12m tons of soybeans this year, and 25m tons in 2026; China to postpone export restriction on rare earth for a year; US will reduce fentanyl tariff rate to 10%; both parties will hold off imposing port fees for another year; TikTok transaction will resume. Trump later told reporters that it was an amazing meeting and on a scale of 0 – 10 with 10 being the best, the meeting was a 12."

"USD rose broadly against a range of currencies. Even the USD/CNY daily fix was set higher at 7.0880 while rise in USD/JPY, post BoJ disappointment also contributed to the broad rise in USD/AXJs. With US-China tensions better managed, USD/AXJ may go back to being driven by idiosyncratic factors for now, until a clearer trend on the USD is established."

"We still look for USD to trend moderately lower but in the absence of US data and non-committal comments from Fed Chair Powell, some position adjustment may take place first. Fed on easing cycle and a more cordial relations between US and China should remain supportive of RMB, risk-proxy FX including AUD while USD may trade on the backfoot, unless equity sentiment faces a surprise shock."

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FXStreet Insights Team

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The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

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