Dollar's Enthusiasm Wanes Amid Moderately Negative US Economy
The dollar is under pressure amid growing concerns about the US economy, which could prompt the Federal Reserve to cut interest rates further.
The dollar index fell 0.4% to trade around 105.77 on Monday, hitting an 11-week low as the euro surged following a conservative victory in Germany's general election.
Dollar enthusiasm has waned amid a number of factors including tariff-related changes (due to the postponed deadline), moderately negative US economic surprises, and reduced equity market volatility. US equities, meanwhile, remain near record highs.
Data released on Friday showed that US business activity nearly stalled in February, with a contraction in the services sector contributing to the slowdown. Consumer sentiment also weakened, driven by inflation concerns and the ongoing impact of President Trump's tariffs.
Market participants are now focusing on this week's PCE price index report, the Federal Reserve's preferred measure of inflation, as well as the second estimate of fourth-quarter GDP growth.
Source: yds (@Newsmaker)