Dollar Weakens as Euro Strengthens
The dollar index fell to around 107.2 on Monday, ending a three-day winning streak, as the euro strengthened on renewed optimism about a possible resolution of the Ukraine conflict. Ukrainian President Volodymyr Zelenskyy announced Sunday that European leaders had agreed to draft a peace plan to present to Washington, just days after he was unable to reach a deal with U.S. President Donald Trump in the Oval Office. The dollar also weakened after U.S.
Commerce Secretary Howard Lutnick said Sunday that tariffs on Mexico and Canada remained “uncertain,” suggesting they could be lower than the proposed 25 percent. However, Lutnick stressed that additional tariffs of 10 percent on China have been confirmed and “set in stone.” Despite these developments, traders continue to expect the dollar to maintain its upward momentum as the trade war escalates. This, in turn, could fuel inflation and discourage the Federal Reserve from cutting interest rates further.
Source: Trading Economics