US Dollar Weakens Below 98.50, Markets Anxious!
The US Dollar Index (DXY) weakened below 98.50 at the start of the European trading session on Monday. This decline was triggered by market concerns about the impact of US President Donald Trump's tariff policies, as well as uncertainty surrounding the US fiscal and debt conditions. Furthermore, doubts about the independence of the Federal Reserve (The Fed) also weighed on the US dollar against other major currencies.
Trade tariffs became a major concern for investors following reports that Trump was pushing for tariffs of 15% to 20% on goods from the European Union. US Commerce Secretary Howard Lutnick added that while a deal with the EU was still possible, the tariff deadline set for August 1st was approaching. This uncertainty led market participants to reduce their exposure to the USD.
Dovish statements from Fed officials also contributed to the weakening of the dollar index. Fed Governor Christopher Waller stated that the central bank should consider cutting interest rates in the near future to support the weakening labor market. Although most analysts still expect interest rates to remain unchanged at the end of this month, signals of policy easing have significantly dampened the USD's appeal among global investors.
However, the dollar's weakness was offset by the release of better-than-expected US economic data. The University of Michigan's preliminary Consumer Sentiment Index rose to 61.8 in July, exceeding market expectations. Furthermore, US housing starts also showed a sharp increase of 4.6% in June, providing some support for the dollar amidst the prevailing negative sentiment.
Source: (ayu-newsmaker)
