Dollar Rises Amid Trade Deal Uncertainty, Yen and Franc Strengthen

The U.S. dollar edged higher Friday, rebounding from earlier losses as markets reacted to mixed signals from President Donald Trump on trade talks and monetary policy. The greenback has swung sharply this week, falling 1% on Monday after Trump criticized Fed Chair Jerome Powell, only to bounce back 1.5% a day later after Trump denied plans to remove him and hinted at easing trade tensions with China.

However, investor confidence remains fragile due to a lack of tangible progress with Beijing. Despite Trump’s assurances of ongoing discussions, Chinese officials denied any active negotiations. The dollar index, which tracks the currency against six major peers, is up just 0.27% for the week, potentially ending a four-week losing streak.

By early Friday, the dollar was up 0.3% against the yen at 143.08 and gained 4% versus the Swiss franc to 0.8303. The euro slipped 0.3% to $1.1355, while the British pound dipped 0.2% to $1.3314.

Talks with South Korea and Japan appear more promising. Seoul aims to finalize a trade deal before reciprocal tariffs resume in July. Japan’s economy minister Ryosei Akazawa will continue talks with U.S. Treasury Secretary Scott Bessent next week, despite no discussions on currency levels, a sensitive issue for Tokyo.

Mizuho analysts noted that any breakthrough with Japan could bolster broader trade optimism and strengthen the dollar, potentially pushing it to 145 yen. However, stalled talks may dampen sentiment further, especially with China.

Meanwhile, Bank of Japan Governor Kazuo Ueda reiterated his cautious stance on rate hikes, pending clearer inflation data and the impact of U.S. tariffs. Tokyo’s core consumer prices rose 3.4% in April year-on-year, reinforcing inflationary pressures.

Bitcoin traded near $94,220, close to Wednesday’s high and its strongest level since early March.