US Dollar recovery attempt short-lived after Trump’s softening stance on China, Powell

April 23, 2025

LONDON (April 23) The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against six major currencies, trades broadly flat near 99.20 at the time of writing on Wednesday after an earlier attempt to test the 100.00 big figure in early Asian trading. The pop in the DXY came on the back of comments from United States (US) President Donald Trump late Tuesday, saying that he had no intention of firing Federal Reserve (Fed) Chair Jerome Powell, despite being frustrated with the high interest rates. The President also said he would be ‘nice’ to China if they come to the negotiating table, offering an olive branch by promising tariffs on China would be much lower than they are now, Bloomberg reports. 

On the economic calendar front, all eyes are on the S&P Global preliminary Purchasing Managers’ Index (PMI) numbers for April. Traders already got a flavor with the European PMI data compiled by S&P Global and Hamburg Commercial Bank (HCOB) released earlier in the day. The mean theme in European core countries is that Services in Germany, France and the Eurozone as a whole fell into contraction and missed expectations across the board. 

Daily digest market movers: PMI leading data

  • At 13:45 GMT, the S&P Global PMI preliminary data for April is due:
    • Services PMI is expected to decline to 52.8, from the previous 54.4.
    • Manufacturing PMI is expected to contract to 49.4, coming from 50.2.
  • Three Fed speakers are lined up for this Wednesday:
    • At 13:00 GMT, Federal Reserve Bank of Chicago President and CEO Austan Goolsbee delivers opening remarks in a virtual presentation at the Federal Reserve Bank of Philadelphia Economic Mobility Summit.
    • Near 13:30 GMT, St. Louis Fed President Alberto Musalem delivers remarks at the Fed Listens Event along with Fed Governor Christopher Waller.
  • Equities are rallying across the board on the back of the softening stance from US President Trump on China and the Fed. US futures pre-market are up over 2%. The German Dax is outperforming by 3%.
  • The CME FedWatch tool shows the chance of an interest rate cut by the Federal Reserve in May’s meeting stands at 4.8% against no changes at 95.2%. The June meeting still has around a 65.4% chance of a rate cut. 
  • The US 10-year yields trade around 4.34% as US bonds are bid together with equities, which means yields are softening. 

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