US Dollar Index (DXY) Slides Below 99.00 Ahead of Crucial US-China Trade Summit

US Dollar Index (DXY) Slides Below 99.00 Ahead of Crucial US-China Trade Summit

The US Dollar Index (DXY) fell below the key 99.00 mark early Monday as investors switched their focus from last week’s upbeat US Nonfarm Payrolls (NFP) to the high-stakes US-China trade summit set to take place in London later today.

Trade Talks Take Center Stage

The dip in the USD reflects a more cautious tone in the global markets as US and Chinese officials prepare for talks aimed at resolving longstanding trade disputes. Over the weekend, President Donald Trump expressed confidence in a positive outcome, tweeting that the summit will go “very well,” boosting market risk sentiment.

The meeting follows a conciliatory phone conversation between Trump and Chinese President Xi Jinping, which helped ease market jitters and added momentum to last month’s tariff rollbacks agreed upon in Geneva.

DXY Retreats Despite Strong NFP

On Friday, the US Labor Department reported a better-than-expected NFP figure of 139,000 new jobs, beating consensus estimates. This data helped the DXY surge to 99.35, its highest level in nearly two weeks.

However, with the Federal Reserve now in its pre-meeting blackout period, and no further economic data of note due Monday, markets are moving beyond the payrolls beat and positioning for geopolitical developments.

The DXY has since reversed to trade below 99.00, placing the Greenback among the weakest G8 currencies to start the week.

What’s Next for the USD?

The Federal Reserve is widely expected to hold interest rates steady at its upcoming policy meeting, following the strong jobs data. Market participants now look toward developments from the US-China summit to provide the next directional cue for the USD.

Technical Levels to Watch:

• Support: 98.70 and 98.40
• Resistance: 99.35 and 99.60

A close below 98.70 may signal deeper losses, especially if the trade talks produce no tangible outcomes.

Related Tredu Insights:

• Why the US Dollar Faces Headwinds Despite Strong Payrolls
• What to Expect from the US-China Trade Talks in London
• DXY Outlook: Fed Blackout, Market Volatility & Rate Bets

Conclusion

While the US Dollar remains underpinned by strong labor market fundamentals, its near-term performance hinges on the US-China trade summit outcome. Any progress or breakdown in talks could significantly reshape market sentiment and trigger sharp moves in the DXY.