The US Dollar stabilized to a certain extent on Wednesday, as markets reassessed the outlook for trade negotiations and monetary policy independence. Treasury Secretary Scott Bessent comments helped ease concerns over a prolonged trade conflict. However, no formal negotiations have been confirmed, which could leave investors in a wait-and-see mode and limit the dollar’s upside.

Adding to the optimism, President Trump stated that he has “no intention” of firing Federal Reserve Chair Jerome Powell. While Trump reiterated his view that rates should be cut, the softened rhetoric helped restore some confidence in the Fed’s independence and reduced speculation over institutional instability. Meanwhile, the 10-year US Treasury yield declined, reflecting improved sentiment toward US assets.

Looking ahead, traders will monitor today’s preliminary S&P PMI data, where soft expectations could increase selling pressure on the dollar. Additionally, speeches from Fed officials, along with this week’s durable goods and jobless claims figures, may offer further insight into the economic outlook and guide expectations around the Fed’s next move.