The U.S. dollar held firm on Monday after early losses, as markets reacted cautiously to renewed trade tensions between Washington and Beijing. Investors hoped that the United States might ease its latest tariff threats against China, offering some relief to global markets. The dollar index, which tracks the U.S. currency against six major peers, rose slightly to 99.00 after recovering from initial weakness. The move followed concerns over President Donald Trump’s decision to impose 100% tariffs on Chinese goods, a policy that revived memories of April’s major tariff escalation. Those earlier measures had triggered a sharp decline in global stocks and digital currencies. Traders said market sentiment remained tense but showed signs of stabilization. Tim Kelleher, head of institutional FX sales at Commonwealth Bank in Auckland, described the atmosphere as “pretty nervous” yet noted signs that the U.S. might soften its approach. He said investors sensed that the president could moderate his tone after initial threats. Trump attempted to reassure markets through his Truth Social account, saying, “Don’t worry about China, it will all be fine!” He added that he did not want an economic downturn in either country and stressed that the United States “wants to help China, not hurt it.” His message helped calm fears of an escalating trade conflict. Trading volumes were lighter than usual because of holidays in both the United States and Japan. The U.S. marked Columbus Day, while Japan observed Health and Sports Day, reducing liquidity in currency markets. Against the Japanese yen, the dollar climbed to 151.98, up about 0.5%. Investors are watching political changes in Tokyo closely after the ruling coalition collapsed on Friday. The departure of the Komeito party has left Liberal Democratic Party leader Sanae Takaichi in a weaker position as she aims to become Japan’s first female prime minister. Political uncertainty in Japan often prompts investors to move money into or out of the yen, depending on market confidence. The euro traded lower at $1.1609, down 0.1%, following political reshuffling in France. President Emmanuel Macron confirmed Prime Minister Sebastien Lecornu’s new cabinet, which retained Roland Lescure as finance minister. The move signaled continuity in economic policy but failed to boost market confidence in the euro zone. Cryptocurrency markets also experienced volatility. After a steep drop on Friday, bitcoin regained some ground and last traded up 0.4% at $115,486.04. Gold, often viewed as a safe-haven asset during uncertain times, rose 0.8% to reach a new record of $4,059.30 per ounce. Analysts said the surge in gold reflected both geopolitical uncertainty and growing concern over currency market fluctuations. In Asia, the offshore yuan strengthened slightly to 7.137 per dollar, supported by hopes that trade relations would stabilize. The Australian dollar rose 0.6% to $0.6513, buoyed by strong demand for commodities, while the New Zealand dollar gained 0.3% to $0.57345. The British pound inched higher to $1.3341, up 0.1%, amid steady U.K. economic data and a cautious global market mood. Market analysts say that although the dollar’s recovery shows resilience, investors remain wary. The coming days could bring more volatility if trade talks or political developments shift again. With Washington and Beijing showing mixed signals, traders are watching for any statement that might hint at policy changes. Experts added that the dollar’s near-term direction will likely depend on both geopolitical moves and upcoming U.S. inflation data. If inflation remains under control, the Federal Reserve may hold interest rates steady, which could support the dollar further. For now, most investors prefer safe and stable positions. Global attention remains fixed on how the U.S.-China relationship evolves and whether the world’s two largest economies can find common ground.