Published by Global Banking & Finance Review®
Posted on October 14, 2025
3 min readLast updated: January 21, 2026
Add as preferred source on GoogleThe US dollar weakens against major currencies as US-China trade tensions resurface, impacting global markets and strengthening the euro.
By Chibuike Oguh and Alun John
NEW YORK/LONDON (Reuters) -The dollar lost ground against major peers including the Swiss franc and Japanese yen on Tuesday as U.S.-China trade tensions resurged, while the euro firmed after the French government proposed suspending a landmark pension reform.
The dollar weakened 0.37% to 0.801 Swiss franc and eased 0.37% to 151.71 yen <JPY=>, a day after rising against both currencies.
"The market got caught a little bit yesterday," said Marc Chandler, chief market strategist at Bannockburn Capital Markets. "People wanted to believe that the U.S.-China trade tensions had de-escalated. But it's clear that they have not."
The U.S. and China on Tuesday began charging additional port fees on ocean shipping firms that move everything from holiday toys to crude oil.
In addition, Beijing announced countermeasures against five U.S.-linked subsidiaries of South Korean shipbuilding firm Hanwha Ocean. China also said it was investigating how its domestic shipping industry might be affected by a U.S. Section 301 probe into allegedly unfair trade practices by foreign countries.
The tit-for-tat measures undermined what appeared to be a conciliatory tone from U.S. President Donald Trump at the weekend that had helped fuel some optimism at the start of this week.
U.S. equities were mixed in choppy trading. The Dow Jones Industrial Average rose 203.54 points, or 0.44%, to 46,271.12. The S&P 500 fell 10.34 points, or 0.16%, to 6,644.39 and the Nasdaq Composite dropped 172.91 points, or 0.76%, to 22,521.70.
"I think what's going on is that markets don't believe that this will be a long-term problem especially with the history of the past year starting in April," said Joseph Trevisani, senior analyst at FX Street.
"China started this particular round of this ... but it's not either in the long-term interest of the U.S. or China for this to continue."
The U.S. labor market remained mired in its low-hiring, low-firing doldrums through September, though the economy "may be on a somewhat firmer trajectory than expected," Federal Reserve Chair Jerome Powell said on Tuesday.
French Prime Minister Sebastien Lecornu suspended a landmark 2023 pension reform until after the 2027 presidential election, bowing to pressure from leftist lawmakers who had demanded such a move to ensure his political survival.
The euro extended gains against the dollar following the announcement. It was up 0.33% at $1.1606.
"It looks like there's going to be less fiscal austerity than the previous government. French bonds are having a good day - they are the best performing in the euro zone," Chandler added.
Britain's pound was off 0.05% on the dollar at $1.3326 after data showed British pay growth slowing and jobless claims ticking higher.
The pound was also softer against the euro, with the common currency up 0.37% at 87.08 pence.
The Australian dollar, often used as a liquid proxy for Chinese assets and broader risk sentiment given the two countries' close economic links, shed 0.32% to 0.6491. The New Zealand dollar fell 0.16% to $0.5716.
Elsewhere, cryptocurrencies were lower, with bitcoin dropping 2.02% to $113,460.16. Ethereum declined 3.59% to $4,135.78.
(Reporting by Chibuike Oguh in New York; Additional reporting by Rae Wee; Editing by Chizu Nomiyama, Alison Williams and Richard Chang)
Foreign exchange, or forex, refers to the global marketplace for trading national currencies against one another, allowing for currency conversion and international trade.
Cryptocurrencies are digital or virtual currencies that use cryptography for security and operate on decentralized networks based on blockchain technology.
Economic growth is the increase in the production of goods and services in an economy over a period, typically measured by the rise in GDP.
The US Dollar Index (DXY) measures the value of the US dollar against a basket of foreign currencies, indicating its strength in the global market.
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