Meanwhile, the euro was poised to record its first monthly drop since December 2024,, following a sharp reaction to a US, European Union (EU) trade deal earlier this week.

Investors were hesitant to place bets before crucial economic reports and central bank meetings in Canada, Japan and the US.

“Markets will be paying attention to Fed Chairperson Jerome Powell’s remarks, regarding any signs of internal dissent within the committee and the chair’s stance amid ongoing tensions with the White House,” said Julien Lafargue, chief market strategist at Barclays Private Bank and Wealth Management.

“A rate cut in September remains a strong base case, much will depend on incoming data, starting with the US jobs report due this Friday,” he added.

The US central bank, to President Donald Trump’s chagrin, will likely leave interest rates unchanged on Wednesday.

The Dollar index was up 0.02% at 98.774. It hit a five-week high at 98.923 on Tuesday and was on course to post its first month of gains this year.

Cumulative percent change year-to-date in foreign currency value against the US Dollar.

Analysts noted the selloff in US assets, including Treasuries and the Dollar, began in early April, when the US appeared poised to launch a trade war against its major allies.

Trade agreements struck with Japan last week and the EU over the weekend signalled a renewed US commitment to global engagement, easing investor concerns.

Investors’ focus is now on negotiations between China and the US after officials agreed to seek an extension of their 90-day tariff truce.

China and the US remain important trade and economic partners, the Chinese commerce minister told a US business delegation on Wednesday, according to his ministry.

–Reuters–