US Dollar Holds Steady as Traders React to US-Japan Trade Deal

The US Dollar remained steady on Wednesday after falling for three days in a row. The calm came after news broke that the United States and Japan had reached a major trade agreement.This deal helped reduce some of the pressure in global markets, especially as the August 1 deadline for new tariffs approaches.

Even though the Dollar stopped falling, uncertainty remains. US President Donald Trump has continued to criticize Federal Reserve Chair Jerome Powell, calling him a “numbskull.” This public attack raised new concerns about whether the central bank can act independently without political interference. As a result, many investors are still cautious.

The US Dollar Index (DXY), which shows how strong the Dollar is compared to six other major currencies, stayed close to 97.40 during Wednesday’s US trading session. Earlier in the week, the index had dropped more than 1%, falling from near its highest level in four weeks. Right now, investors are watching closely to see what happens next with trade talks and economic policy.

Trump’s New $550 Billion Deal With Japan Brings Some Relief

On Tuesday, President Trump announced a new trade deal with Japan, which he described as one of the biggest in US history. Under the agreement, tariffs on many Japanese goods will drop from 25% to 15%. In return, Japan will allow more American products—like cars, trucks, rice, and farm produce—into its market. Trump also said the deal would bring $550 billion in Japanese investments to the US, and that most of the profits would benefit American workers and companies.

This news gave markets a boost, easing fears of a bigger trade war, at least for now. However, other trade talks are still ongoing. The US has not yet reached final agreements with countries like India, the European Union, or China. Until those deals are made, uncertainty about the Dollar’s future may continue.

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