Following a rally driven by better-than-expected US employment data, the dollar retreated on Monday as markets turned attention to high-stakes trade negotiations between the US and China in London.
The talks seek to address unresolved issues from last month’s Geneva agreement. Economic pressures are mounting on both sides: China faces deepening deflation with factory-gate prices at two-year lows and slowing export growth, while US businesses and consumers grapple with trade uncertainty.
The dollar fell 0.46% against the yen to 144.16, while the euro rose 0.2% to $1.1418 and sterling climbed 0.3% to $1.3558.
Investors are now watching for May’s US inflation report to gauge the impact of tariffs on the economy, with the Federal Reserve expected to maintain its patient stance on interest rates.