USD weakens as Trump-Xi call delayed amid China rare earth restrictions

The US dollar index fell 0.5% to 104.20 as markets reacted nervously to escalating US-China trade tensions. China's April export restrictions on seven rare earth metals, crucial for technology manufacturing, have intensified concerns about supply chain disruptions. The postponement of the Trump-Xi call originally scheduled for this week added to market uncertainty, pushing investors toward safe-haven currencies. The Japanese yen strengthened 0.8% against the dollar to 154.30, while the Swiss franc gained 0.6%. Gold surged 1.2% to $2,045 per ounce as risk-off sentiment dominated trading. Technical indicators show USD/JPY breaking below the 155.00 support level, with next support at 153.50. The dollar's weakness could accelerate if diplomatic talks fail to materialize this week, potentially testing the 103.50 level on the DXY. Traders should monitor any developments in US-China communications and prepare for heightened volatility across major pairs.