The US dollar is rebounding just 0.05% in a mild correction after yesterday’s drop of nearly 0.60%. Dollar weakness reflects growing uncertainty in the markets ahead of the August 1 tariff deadline. Recent comments from US officials suggest that this deadline may be flexible — the priority appears to be thorough negotiations rather than quick decisions. This shift in sentiment, combined with the fading momentum of the recent rebound, has weakened the USD’s position in the market.
Uncertainty around the negotiations is confirmed by the lack of progress in recent talks with Japan and India — countries that, according to Trump, were expected to reach an agreement.
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A Japanese representative met in Washington with US Commerce Secretary Lutnick, but the talks yielded no progress. They were described as sincere but lacking specifics. Both sides remain far from an agreement.
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Despite Trump’s assurances, reports suggest that even a limited US–India trade deal is unlikely to be reached by August 1. India has yet to receive formal notice of the tariffs. Disputed issues include steel, aluminum, automotive, and agriculture. A broader deal may be postponed until the fall.
Currency pairs like EURUSD and GBPUSD have regained momentum, breaking key levels and putting renewed downward pressure on the dollar. USDJPY also weakened despite an attempted rebound — though political uncertainty in Japan and firm Japanese yields complicate the picture. AUDUSD maintains a more neutral stance — holding key support despite last week’s weak labor market data. Overall, the dollar’s outlook remains mixed and hinges on the further progress of trade negotiations.
