The dollar index rose on Tuesday, gaining alongside U.S. equity indexes that were supported by positive sentiment from tech share gains, and supported by an unexpected rise in job openings in April and a hopeful outlook as trade negotiations appeared set to ramp up before the five-week deadline. The White House confirmed that the Trump administration has sent a letter to all of its trading partners, adding that U.S. Trade Representative Jamieson Greer is in Paris meeting with counterparts and that a deal announcement was expected soon. Separately, U.S. President Donald Trump will sign an executive order making official his vow to double tariffs on steel and aluminum. China's Foreign Minister Wang Yi told the U.S. ambassador to Beijing that the U.S. should create the necessary conditions for bilateral relations to get back onto "the right track", according to a ministry statement. Atlanta Fed President Raphael Bostic said a strong economy gives the U.S. central bank time to weigh the tariff impact, while remaining open to a possible cut later this year. Federal Reserve Governor Lisa Cook said that U.S. monetary policy is in a good place to respond while Chicago Fed President Austan Goolsbee said higher inflation from tariffs could become evident quickly, but it may take longer to see an economic slowdown. EUR/USD slipped following a report that euro zone inflation fell below the European Central Bank's target last month, reinforcing expectations of a 25 basis point rate cut on Thursday. The collapse of the Dutch government also weighed on euro sentiment.
EUR/USD slipped toward a rising 5-day moving average at 1.1364 though a series of higher daily lows and favorable risk reversals offered support. A EUR/USD close below the 1.1285 21-day moving average would help turn the tide against bulls though a number of large, nearby expiries are helping hold it in place.
GBP/USD eased marginally against the broadly stronger stronger greenback. Bank of England Governor Andrew Bailey said a "gradual and careful" approach to cutting interest rates is appropriate as global trade policy turmoil clouds the outlook.
Cable continues to meander in the upper half of its Bollinger range and just below its 2025high of 1.3593. May U.K. PMI data is slated for Wednesday.
USD/JPY tested its cloud bottom as U.S. shares and Treasury yields firmed. The pair was also bolstered by monthly hedging flows in the greenback. Further gains would test a series of lower highs, the conversion line and its 21-DMA at 144.65, whereas key support is near its 142.11 May low.
The JibunBK composite PMI for May and U.S. ADP report are some data risks on Wednesday.
Treasury yields were lightly mixed as the curve flattened. The 2s-10s curve eased to +50.3bp.
The S&P 500 rose 0.60% with tech and energy shares leading the advance. Oil prices rose 1.54% due to geopolitical tensions involving Russia and Iran. Gold fell 0.77% as the dollar rose while copper was little changed.
Heading toward the close: EUR/USD -0.61%, USD/JPY +0.88%, GBP/USD -0.15%, AUD/USD -0.45%, DXY +0.57%, EUR/JPY +0.30%, GBP/JPY +0.75%, AUD/JPY +0.49%.(Editing by Burton Frierson Reporting by Robert Fullem)
