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Tariff developments remain fluid even if we are in a de-escalation phase. Trump/Bessent continued to speak about how ‘all aspects’ of the US government are in contact with China regarding trade even as Beijing denied the existence of negotiations. It appears that the US is still waiting for China to make the first official move to de-escalate. DXY was last at 99.13 levels, OCBC’s FX analysts Frances Cheung and Christopher Wong note. The recent low at 98 is key “In an overnight interview with CNBC, Bessent said ‘As I’ve repeatedly said, I believe it’s up to China to de-escalate because they sell five times more to us than we sell to them, so these 125% tariffs are unsustainable’. He also added that ‘the Chinese exempting some goods from tariffs indicates they are interested in reducing tensions’. Bessent further said that he has ‘an escalation ladder in my back pocket and we’re very anxious not to have to use it… Escalation could include an embargo’.” “This implies that safe-haven proxies, including JPY, CHF and gold may strengthen at the expense of further USD sell-off. Bearish momentum on daily chart faded but recent rise in RSI has slowed and started to exhibit signs of falling. Renewed USD softness cannot be ruled out. More importantly, the recent lows at 98 levels is key. Decisive break below may open another round of decline for DXY. Next support at 97.50, 96.90 levels before 95.50. Resistance at 99.80, 100.80/101 levels (23.6% fibo retracement of 2025 peak to trough, 21 DMA).” “This morning, USD traded mixed with strength pronounced against CHF, NZD and precious metals but USD traded softer vs. AxJ FX. In particular, RMB-proxy THB and MYR led gains. Firmer RMB, following the lower-than-expected USD/CNY daily fix (lowest since 7 Apr), chatters of Chinese exporters increasing…

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Filed under: News - @ April 29, 2025 10:23 am