BETA Technologies launches IPO of 25 million shares priced $27-$33
Investing.com - The U.S. dollar strengthened after slipping earlier in the session on Monday, as investors assessed statements from President Donald Trump on recent trade tensions with China.
As of 05:56 ET (09:56 GMT), the U.S. dollar index, which measures the greenback against a basket of major currencies, had edged 0.1% higher to 99.09.
Late last week, the greenback weakened after U.S. President Donald Trump reignited trade fears by threatening duties of up to 100% on U.S.-bound Chinese goods and fresh export controls on critical technology.
However, Trump softened his tone over the weekend, saying markets should “not worry about China." He signaled that Washington did not intend to escalate hostilities imminently, a shift that helped steady sentiment, though traders remained wary of unpredictable policy changes out of the White House.
"We are not convinced that this trade escalation between U.S. and China is over from [the] social media tweet from Trump, given the huge gulf of expectations between both U.S. and China," MUFG analysts said in a note.
"As such, we think markets could remain volatile in the near-term, and in the broader context of assets priced quite closely for perfection, we think both realised and implied vol across assets could start to pickup somewhat from reasonably low levels currently," they added.
Some market liquidity may be impacted by the Columbus Day/Indigenous Peoples’ Day holidays on Monday, but stock exchanges on Wall Street are due to remain open. U.S. stock futures were pointing into the green.
Elsewhere, the euro dropped by 0.2% against the dollar. On Sunday, the French presidency unveiled the new cabinet of Prime Minister Sebastien Lecornu, who was reappointed only days after he resigned from the role in the wake of a widespread backlash to his previous cabinet picks.
Lecornu said his updated cabinet would reflect a focus on "renewal and diversity," although the names he has announced are mostly the same as before, including the reappointment of Roland Lescure as finance minister.
Yen drops as Japan coalition split clouds Takaichi bid
The Japanese yen has been among the laggards in major Asian currencies. Versus the yen, the dollar rose 0.7% to 152.18 yen. Japan was closed for the Health and Sports Day on Monday.
The yen has come under pressure after the junior Komeito party exited the governing coalition last week, casting doubt on whether ruling party candidate Sanae Takaichi can secure enough parliamentary support to become prime minister.
This has subsequently fueled concerns about policy continuity and fiscal direction in Japan. Takaichi has advocated for aggressive fiscal stimulus, and investors see heightened uncertainty as a reason for the Bank of Japan to maintain its ultra-loose stance for longer.
Along with the yen, the Swiss franc also weakened against the dollar. Analysts at MUFG cited by Reuters flagged that the new round of trade uncertainty could spark wider currency volatility in the near term and trigger some unwinding of the so-called "carry trade," in which currencies are borrowed at a low cost to invest in higher-yielding options.
(Ayushman Ojha and Reuters contributed reporting.)