The US dollar continued to trade weakly on Wednesday over uncertainty around US-China trade negotiations finalizing into a deal anytime soon. This drove up the demand for safe havens in global financial markets and caused US bond yields to fall to their lowest levels some 2016.
At the time of writing, the dollar index DXY is trading at 96.75, below the 96.875 level it touched on Tuesday. The yield on the US 10-year Treasury note fell to 1.948% early on Wednesday morning, the lowest since November 2016.
Earlier this week, the market sentiment had improved after Trump and his Chinese counterpart Xi Jinping announced a fruitful resumption in trade talks at the G20 summit. However, with no further updates on the progress, markets worry about whether the trade deal will happen anytime soon.
The US dollar has also weakened after the government threatened a new round of tariffs on Tuesday, on $4 billion worth of EU goods over the aircraft subsidies issue.