USD Bounces Back as Markets Eye ISM and Trump-Xi Trade Talks

USD Bounces, But Trade and ISM Set to Drive Direction – ING

Dollar Strengthens on Jobs Data, But Trade Talks Remain the X-Factor

The US Dollar (USD) recovered modestly in Tuesday's session, supported by the April JOLTS job openings, which came in stronger than forecast. While not a game-changer for the labor market outlook, the data reinforces the narrative of a still-tight jobs market, though declining quits indicate wage pressures may be easing.

Treasury yields also climbed, but the Dollar's gains were muted, suggesting markets may be struggling to justify elevated risk premiums without fresh trade or fiscal shocks.

ING Cautious on USD Upside, Eyes Trump-Xi Call

According to ING analysts, while the Dollar could see short-term gains if the anticipated Trump-Xi Jinping call results in softer rhetoric, any rally is unlikely to be sustained.

🗣️ "Markets are pricing in hope—not resolution," ING notes, highlighting that recent direct contact between the two leaders has historically de-escalated trade fears, but has yet to produce tangible agreements.

Furthermore, President Trump’s recent 50% tariffs on steel and aluminum are already in effect, and his own comments calling Xi “extremely hard to make a deal with” further limit the potential for an immediate breakthrough.

ISM Services PMI in Focus

Markets are now looking ahead to the release of the ISM Services PMI, a crucial indicator for the strength of the US service sector. A weaker-than-expected reading could pressure the Dollar again, particularly if paired with dovish Fed commentary or geopolitical noise.

Internal Links:

• Live USD Index Tracker
• Trump-Xi Trade Timeline
• What is the ISM Services PMI?