The US dollar maintained its recent gains on Tuesday after the United States and China announced a pause in tariffs. This announcement caused a relief rally in stock and currency markets on Monday, with the dollar surging to a one-month high against other currencies.
China’s yuan reached a six-month high, which also helped boost the Australian and New Zealand dollars. Despite these gains, some analysts believe the dollar’s strength may be temporary, with predictions of a long-term weakening trend as investors reconsider their heavy investment in US assets.
The trade tension reduction has also lowered expectations for Federal Reserve rate cuts this year.