Rumours of a deal
Low liquidity during the UK bank holiday didn’t shield the US Dollar from further selling pressure. Over the weekend and into Monday, rumours had been building that the US and Taiwan were nearing a trade deal. More than just a trade deal, rumour has it that Trump’s Mar-a-Lago playbook is on. That means that it is thought that progress so far on a US-Taiwan trade deal includes conditions for the active or designed weakening of the US Dollar. The Taiwanese Dollar, of course secured the biggest bid at market open yesterday but regional FX also outperformed.
It is not the rumours of a trade deal with Taiwan per se that forced the Dollar lower. Instead, it is the thought that should de-dollarisation, or just a persuasion to a weaker Dollar be present in any initial deal, it may likely serve as a blueprint for other more significant deals that may follow. Amidst the backdrop of stronger APAC FX, the Singaporean Dollar and Japanese Yen outperformed with AUD not far behind. The Chinese Renminbi, whilst a strong barometer for regional sentiment despite its active management, may have been hindered from reflecting local trade optimism due to similar bank holidays in China yesterday.
The rumour mill will have started churning far too late and quietly to have any expected impact upon the Fed’s decision making this week. Trump’s administration has been swift to downplay any such rumours including the suggestion that the US is seeking to devalue any assets including the Dollar. This was evident from Bessent’s comments yesterday that caught headlines.
Discussion and Analysis by Charles Porter
Related Insights
Daily Brief – On course for Warsh?
Charles Porter
Thu 19 Mar 2026
On course for Warsh? The latest Federal Reserve decision concluded last night. Mirroring the prior decision, the FOMC voted to keep policy rates on hold within a band of 3.5-3.75%. Ordinarily, yesterday’s meeting could have been a lesser-event. After all, with the arrival of Chair Jay Powell’s successor on May 15th, this could have been […]
Daily Brief – Where’s the Beta
Charles Porter
Thu 12 Mar 2026
Where’s the Beta Amongst FX, there exist currencies known as ‘commodity currencies’. This isn’t a fixed basket of currencies, however, particular candidates spring to mind when the group are mentioned. The foremost amongst the G10 are the Canadian, Australian and New Zealand Dollars. These currencies are so-called because they typically exhibit a positive correlation with […]
Daily Brief – The only way is $
Charles Porter
Tue 17 Mar 2026
The only way is $ The Dollar has served as the first-choice safe haven currency during this latest bout of geopolitical risk. Safe havens need to exhibit lower levels of volatility during times of elevated risk and, on balance, exhibit a negative price correlation with perceived risk. As geopolitical risk was on the rise over […]
