The US Dollar is trading around 98.4 after hitting a three-year low, pressured by concerns surrounding the Federal Reserve’s independence and the potential economic consequences of the ongoing global trade war. Disappointment in trade talk progress and escalating tensions between the US and China further contribute to the dollar’s weakness.
- The dollar index traded around 98.4 on Tuesday.
- The dollar index hit a fresh three-year low in the previous session.
- Concerns about the Federal Reserve’s independence pressured the currency.
- The potential economic fallout of the global trade war pressured the currency.
- President Trump said that the Fed should cut interest rates immediately.
- Trump’s comments targeted Chair Jerome Powell, who wants to wait for the impact of tariffs on inflation.
- The White House floated the possibility of removing Powell.
- Markets were disappointed by the lack of progress in trade talks.
- China accused the US of abusing tariffs.
- China warned other countries against striking a deal with Washington at its expense.
- The dollar has dropped nearly 6% this month.
- The sharpest losses were recorded against the euro, yen, and Swiss franc.
The US Dollar faces a challenging environment. Political pressure on the central bank and escalating trade tensions are undermining investor confidence. This could lead to continued weakness for the currency, particularly against other major currencies perceived as safer havens or benefiting from different economic climates. The lack of resolution in trade disputes and ongoing uncertainty regarding monetary policy further exacerbate these downward pressures.