Dollar Stumbles! Stock Euphoria and Fed Signals Drag DXY Below 98
The US Dollar Index (DXY) weakened on Friday, falling below the psychological level of 98.00 as global investor risk appetite increased and US bond yields declined. The DXY is currently testing 97.95, retreating from a three-week peak of 98.50 reached earlier.
The dollar's weakness was triggered by a surge in risk appetite after several major US companies posted earnings reports that far exceeded expectations. Netflix, TSMC, PepsiCo, and United Airlines all delivered positive surprises, bolstering investor confidence and lifting global equity markets.
This risk-on sentiment put pressure on the US dollar as a safe-haven asset, as market participants shifted to stocks and other riskier assets. Furthermore, US government bond yields also declined, putting additional pressure on the greenback.
Dovish comments from Federal Reserve Governor Christopher Waller also weakened the USD. In his statement, he reiterated his suggestion that the Fed consider cutting interest rates, given the risks to economic growth and the labor market.
Even so, on a weekly basis, the DXY trend still shows a gain of around 0.55% compared to the opening of the week. Previous US economic data—including June retail sales and weekly jobless claims—still point to solid economic fundamentals, providing support for the dollar in the medium term.
Source:(ayu-newsmaker)
