By Amanda Cooper and Koh Gui Qing
NEW YORK/LONDON (Reuters) -The U.S. dollar slid on Friday and was set for its worst week in over a year after President Donald Trump suggested a softer stance on tariffs against China, adding to uncertainty around the trade policy that kept equity markets on edge.
Trump told Fox News in an interview on Thursday evening his recent conversation with President Xi Jinping was friendly and he thought he could reach a trade deal with China.
“We have one very big power over China, and that’s tariffs, and they don’t want them, and I’d rather not have to use it, but it’s a tremendous power over China,” he said.
The U.S. dollar dropped 0.8% against a basket of currencies, and is set to lose 2% for the week. That is the worst week since July 2023.
Yet, some analysts warned that the dollar could reverse and rise again if the U.S. tariff and interest rate policies shifted.
“We think that the dollar has further to climb,” said Simon MacAdam, the deputy chief global economist at Capital Economics.
“Its appreciation so far has reflected both the strength of the economic data in the US relative to peer economies and investors’ assessment of Trump’s policies, both of which have contributed to a shift in interest rate differentials that has been favourable to the dollar.”
The MSCI index for world stocks added 0.2%, while stocks on Wall Street were lackluster. The S&P 500 index was flat, the Dow Jones Industrial Average lost 0.2%, and the Nasdaq…