US Dollar Rallies Amid Optimistic Trade Outlook

The U.S. dollar gained ground recently, with the Dollar Index rising as traders responded to better-than-expected consumer sentiment data and comments from Treasury Secretary Scott Bessent, who signaled expectations of a de-escalation in U.S.-China trade tensions. This optimism contributed to the dollar's recovery against major currencies, including the Japanese yen, where technical analysis pointed to potential further gains. Despite the rebound, the dollar remains near multi-year lows versus the euro and Swiss franc, as concerns linger about the Federal Reserve's independence following increased political pressure from the White House. Analysts warn that any drastic action against Fed Chair Jerome Powell could damage confidence in U.S. capital markets and the dollar's reserve status. The Bank of England's Megan Greene noted that the dollar has historically rallied after initial depreciations during major crises, suggesting current moves are not unprecedented. Overall, exchange-rate movements remain closely tied to both geopolitical developments and central bank policy expectations.