Investors Await Pivotal U.S.-China Trade Talks Amid Dollar Stability

As of October 24, 2025, the U.S. dollar has remained steady, poised for a modest weekly gain against major rivals. This comes as investors brace for delayed inflation data, which is unlikely to deter the Federal Reserve from lowering interest rates next week.

Concerns over the ongoing trade war have resurfaced, with U.S. President Donald Trump stating that all trade talks with Canada have been terminated. However, the overall market reaction has been fairly subdued, as investors' attention remains fixed on the highly anticipated meeting between Trump and Chinese President Xi Jinping next week.

Expectations are high for a resolution to the on-again-off-again trade war between the world's top two economies. "Investors are getting used to the process of aggressive statements followed by compromise and headline deals, so hopefully this is another example," said Ben Bennett, head of investment strategy for Asia at L&G Asset Management.

Meanwhile, the Japanese yen has weakened to a two-week low, as the country's new Prime Minister Sanae Takaichi prepares an economic stimulus package to help households tackle inflation. This could prove to be a hurdle for the Bank of Japan to hike interest rates next week, with traders ascribing only a 19% chance of an increase.