Stock markets rebounded on Wednesday after U.S. President Donald Trump said he had no plans to fire the chief of the Federal Reserve and hinted at lower tariffs for China.
Amid the wave of relief, the U.S. dollar jumped sharply after Trump backed off threats to dismiss Fed Chair Jerome Powell, which have impacted investor confidence in U.S. assets over the last week. The dollar rose 0.2 percent on the Japanese yen to 141.77 after hitting a seven-month low of 139.89. Earlier, it jumped as much as 1.1 percent.
The dollar also rose 0.4 percent on the Swiss franc to 0.8218, while the euro slipped 0.2 percent to $1.1399. The U.S. dollar index was trading 0.39 percent higher at 99.31.
Asian shares rise on U.S.-China trade deal prospects
Trump also reiterated that he wants a deal with China where tariffs would not be anywhere near 145 percent, adding that he would set the terms of a deal if Beijing did not enter talks.
It was also reported that U.S. Treasury Secretary Scott Bessent on Tuesday said that he believes there will be a de-escalation in U.S.-China trade tensions, but negotiations with Beijing have not yet started and would be a “slog”.
Investors reacted by buying back declining stocks. In the Asian stock market, Japan’s Nikkei jumped 1.93 percent as of 6:13 GMT, while South Korea’s SE KOSPI Index rose 1.47 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan remained largely steady.
The Taiwan Weighted Index was up 4.50 percent while the Shanghai Composite Index dipped 0.12 percent. The broader Topix index rose 1.89 percent to 2,580.10. Meanwhile, Hong Kong’s Hang Seng Index gained 2.08 percent to 22,010.57.
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Wall Street extends gains
In the United States, Wall Street extended its overnight gains as S&P 500 futures climbed 1.61 percent and Nasdaq futures gained 1.91 percent. The U.S. stock market’s sentiment was driven by some upbeat earnings results.
Despite missing forecasts, Tesla shares were trading 4.60 percent higher at $237.97. Meanwhile, Apple gained 3.41 percent to $199.74, and Microsoft rose 2.14 percent to $366.82. Meta gained 3.22 percent, Amazon rose 3.50 percent, and Alphabet was up 2.70 percent.
Treasuries rallied as Trump’s reversal on Powell eased threats to U.S. monetary credibility. Yields on 30-year bonds declined 8 basis points to 4.795 percent, while two-year yields rose 1 basis point to 3.820 percent.
In commodities, Brent crude futures increased by 55 cents, or 0.8 percent, reaching $67.99 a barrel at 04:00 GMT, while U.S. West Texas Intermediate crude rose by 54 cents, or 0.9 percent, to $64.21 a barrel.
Meanwhile, spot gold dropped by 2.45 percent to $3,323.95 an ounce and U.S. gold futures fell 2.54 percent to $3,332.54.
