US-Korea discussing exchange rate policies, market detects signals of Trump's inclination towards a weak US dollar.

The US dollar gave back all of its gains this week, as the market once again speculated that US President Donald Trump is inclined to weaken the dollar and may encourage other countries to allow their currencies to appreciate in exchange for trade agreements with the US. The dollar continued its decline on Wednesday, following reports that Korean and US officials discussed exchange rate policies at a meeting in Milan on May 5th and will continue to negotiate on this issue. The Korean won rose nearly 2%, while the Japanese yen also strengthened, leading to a second consecutive day of decline for the Bloomberg Dollar Spot Index.