Dollar Rebounds Amidst Trade Talks Hopes

The U.S. dollar rebounded against major peers as hopes rose for de-escalating trade tensions and President Trump backed down from firing the Federal Reserve head. Possible tariff reductions and ongoing negotiations with China added optimism. However, market sentiment remained fragile, with concerns over the Fed's independence persisting.

The U.S. dollar made a significant comeback on Wednesday, influenced by rising optimism regarding trade talks and President Donald Trump's decision to not dismiss the Federal Reserve head. This development provided relief to investors amid the ongoing tension between the U.S. and China.

The Trump administration is considering lowering tariffs on imported Chinese goods, pending discussions with Beijing. This potential reduction in trade tensions boosted the dollar against the euro and the Swiss franc, as U.S. Treasury Secretary Scott Bessent hinted at possible de-escalation in the trade conflict.

Market sentiment remains cautious as the Fed's independence is questioned after Trump's criticisms on Chair Jerome Powell. Despite these challenges, the dollar made gains, moving up 0.297% to 99.86, as the euro and yen faced setbacks. Adding to the economic climate, Bitcoin surged above $90,000 for the first time since March.

(With inputs from agencies.)