The euro skidded in European trade on Monday to a five-week trough against the US dollar, as concerns about a US recession diminished after a US-China deal to pause tariffs for 90 days in a huge trade achievement.

It comes following intense negotiations between US and Chinese officials in Switzerland until a preliminary trade deal was announced. 

The Price

The EUr/USD price fell 1.3% today to $1.1099, the lowest since April 10, with a session-high at $1.1246.

The pair closed up 0.2% on Friday, the first profit in three days away from multi-week lows.

The pair lost 0.45% last week, the third weekly loss in a row as the risk appetite improved markedly. 

The US Dollar

The dollar index rallied over 1.25% on Monday to a five-week high at 100.71 against a basket of major rivals.

The US and China agreed on suspending most tariffs on each other for 90 days after negotiations in Switzerland, in a huge step towards relaxing trade tensions between the world’s top two countries.

According to the temporary agreement, the US will cut tariffs from 145% to 30%, including a 20% tariff related to fentanyl, while China will cut tariffs from 125% to 10%.

US Treasury Secretary Scott Bessent hailed the “very productive talks” with Chinese counterparts, and praised the place of negotiations besides the serene Geneva lake. 

Bessent asserted the tariff pause will carry on for 90 days with both sides cutting tariffs by 115%.

Both sides vowed to carry on economic and trade negotiations in upcoming weeks. 

The US and China agreed on suspending most tariffs on each other for 90 days after negotiations in Switzerland, in a huge step towards relaxing trade tensions between the world’s top two countries.

According to the temporary agreement, the US will cut tariffs from 145% to 30%, including a 20% tariff related to fentanyl, while China will cut tariffs from 125% to 10%.

US Treasury Secretary Scott Bessent hailed the “very productive talks” with Chinese counterparts, and praised the place of negotiations besides the serene Geneva lake. 

Bessent asserted the tariff pause will carry on for 90 days with both sides cutting tariffs by 115%.

Both sides vowed to carry on economic and trade negotiations in upcoming weeks. 

The Japanese yen fell  in Asian trade on Monday against a basket of major rivals, resuming losses against the dollar after a short hiatus  on Friday, and plumbing five-week lows as the risk appetite improved in the global markets following progress in US-China trade talks.

The yen is also pressured by higher 10-year US treasury yields before important inflation data, which could provide clues on future Fed interest rate decisions.

The Price

The USD/JPY price rose 0.65% to 146.28, the highest since April 10, with a session-low at 145.70.

The yen rose 0.35% on Friday against the dollar, the first profit in three days away from recent four-week lows.

The yen lost 0.3% last week against the greenback, the third weekly loss in a row as the odds of a Japanese interest rate hike in June declined, while risk appetite improved.

US-China Trade Talks

The US and China ended a round of trade talks in Switzerland on Sunday amid positive signals from both sides on achieving progress on calming trade tensions.

US Treasury Secretary Scott Bessent described the talks as constructive and effective, with progress achieved in tackling disputed issues.

Both sides agreed on establishing a new mechanism for economic and trade discussions to fix future disputes in an orderly way.

Both sides didn’t reveal details yet, but a joint statement will be released on Monday.

US Yields 

US 10-year treasury yields rose 0.8% on Monday, expanding the gains for the third straight session and hitting a three-week high at 4.418%, underpinning the dollar.

It comes amid an improving risk appetite in the global markets and before important US inflation data for April tomorrow.

Gold prices rose on Friday as the dollar fell against most major rivals, while marking weekly gains even as trade tensions calmed. 

Trump wrote on his Truth Social platform that imposing 80% tariffs on Chinese goods looks like the right step, but the decision will be left in Scott Bessent’s hands before trade talks with China in Switzerland on Saturday.

Trump asserted that more trade deals with other countries will be reached soon without laying into details.

Otherwise, the dollar index fell 0.2% as of 20:29 GMT to 100.4, with a session-high at 100.8, and a low at 100.01.

On trading, gold spot prices rose 1% as of 20:30 GMT to $3337.6 an ounce, with a weekly profit of 3.1%.