Dollar Climbs to Two-Week High vs Yen as Trade Talks and Fed Meeting Take Center Stage
The U.S. dollar strengthened to a more-than-two-week high against the yen on Monday, kicking off a week packed with global trade negotiations and key central bank meetings.
The Australian dollar also advanced, supported by optimism over progress in U.S.-China trade talks, which lifted demand for risk-sensitive assets. Meanwhile, the Japanese yen fell to record lows against both the euro and the Swiss franc.
Trade Talks and Fed Policy in Focus
U.S. President Donald Trump is expected to meet Chinese President Xi Jinping in South Korea on Thursday to finalize the framework of a trade agreement discussed over the weekend. While Trump travels through Asia, the U.S. Federal Reserve is widely expected to announce another interest rate cut, following softer-than-expected U.S. inflation data on Friday.
“Looking ahead, we think dollar firmness is likely to remain in the near term,” said Mahjabeen Zaman, head of FX research at ANZ, during a podcast. “Fed cuts are fully priced in for the October and December meetings, so any cautious tone from the Fed could further support the U.S. dollar.”
The dollar rose 0.1% to 153.03 yen, reaching 153.26—its strongest level since October 10. The U.S. dollar index held steady at 98.90, reflecting broad resilience.
Market Movements Across Currencies and Crypto
The euro remained stable at $1.163, while strengthening to 178.13 yen, a record high. The Swiss franc also touched an all-time high of 192.27 yen.
Elsewhere, sterling edged up 0.1% to $1.3327, and the Australian dollar gained 0.4% to $0.6541.
In cryptocurrency markets, Bitcoin climbed 1.8% to $115,441.69, while Ethereum surged 4% to $4,227.56, tracking a broader improvement in global risk sentiment.
Trade Progress Boosts Global Markets
U.S. Treasury Secretary Scott Bessent said ASEAN summit discussions in Kuala Lumpur helped avert the planned 100% tariffs on Chinese imports due November 1. He added that China will delay its rare-earth export licensing regime by a year as it reviews policy implementation.
“We’ve obviously had a risk-positive start to the week, following the weekend’s trade news,” said Ray Attrill, head of FX research at National Australia Bank. “At the margin, positive risk sentiment still weighs slightly against the dollar.”
Trump and Xi are set to meet again during the APEC summit in Gyeongju, South Korea, where they are expected to sign off on final trade terms. Ahead of that, Trump will visit Japan for talks with Prime Minister Sanae Takaichi on Tuesday.
Fed Rate Cut Expected; Markets Eye Powell’s Comments
The Federal Reserve is widely expected to cut interest rates by 25 basis points on Wednesday, lowering its benchmark rate from 4% to 4.25%. This move follows cooling inflation data and is already largely priced into financial markets.
Investors will focus on Fed Chair Jerome Powell’s remarks for clues about future rate decisions, with another cut anticipated in December.
In Japan, the Bank of Japan will meet later this week to discuss whether conditions justify resuming rate hikes as tariff concerns ease. However, most analysts expect the BOJ to keep its policy rate unchanged at 0.5%. Prime Minister Takaichi has called for BOJ cooperation to sustain inflation driven by wage growth rather than energy prices.
