The dollar index remained below 99 on Wednesday, as investors assessed recent trade developments and comments from Federal Chair Powell that reinforced expectations of continued interest rate cuts. Treasury Secretary Scott Bessent proposed a longer pause on high US tariffs on Chinese goods in exchange for Beijing delaying its planned restrictions on rare earth exports, offering some relief to investors after recent tensions. The move followed a renewed escalation, with President Trump ultimately threatening a cooking oil embargo in response to China’s soybean boycott. On the monetary policy front, Chair Powell on Tuesday warned of rising risks to employment, strengthening market bets on further easing. The odds of another 25-basis-point Fed rate cut this month currently stand at about 97%. Meanwhile, the euro advanced after France proposed suspending major pension reforms, while the yen strengthened as traders unwound the “Takaichi trade”.