USD faces uncertainty amid US-China tensions, communication ongoing

The US dollar showed mixed performance in Asian trading as US-China relations remain strained despite ongoing diplomatic communications. China's spokesperson confirmed both nations continue dialogue over mutual concerns, following President Trump's earlier comments expressing skepticism about finding a permanent solution to bilateral issues. Trump stated the US will not trust China while China will not compromise its sovereignty, highlighting deep-rooted tensions affecting global trade flows. Currency markets are closely monitoring these developments as prolonged US-China friction could impact risk sentiment and safe-haven demand. The dollar index held near 104.50 as traders weigh geopolitical risks against upcoming US economic data. Further escalation in rhetoric could strengthen the dollar's safe-haven appeal, while any breakthrough in negotiations might pressure the greenback as risk appetite improves. Traders should watch for official statements from both governments for directional cues.