DXY DOLLAR INDEX The DXY has declined from its current high 114.54 to 96.59 reflecting a weaker dollar against a basket of major currencies including the euro, yen, pound, Canadian dollar, Swedish krona, and Swiss franc.
Despite this decline, the dollar remains supported by strong US economic growth and higher US 10-year bond yields, which have widened the yield gap with other developed economies .
The Federal Reserve’s monetary policy has been relatively hawkish, with fewer rate cuts priced in compared to other central banks, helping to underpin the dollar.
Trade tensions and tariff uncertainties continue to create volatility, but the dollar benefits from safe-haven demand amid global uncertainties
Composition of the DXY Basket:
Euro (EUR): 57.6%
Japanese Yen (JPY): 13.6%
British Pound (GBP): 11.9%
Canadian Dollar (CAD): 9.1%
Swedish Krona (SEK): 4.2%
Swiss Franc (CHF): 3.6%
context
Drivers: US economic strength, Fed policy, bond yield differentials, trade tensions, and safe-haven flows keeping dollar on support hold.
Ongoing US tariff announcements and trade policy changes have contributed to volatility and risk aversion, pressuring the dollar lower.
US Economic Policy the Market is concerned about fiscal policy, Federal Reserve independence, and rising US debt which have led to reduced demand for US assets, further weighing on the dollar.
Interest Rate Differential:
The US Fed funds rate remains at 4.50%-4.25%, but with global central banks adjusting policy, the relative appeal of the dollar has diminished.
Conversely, a sustained move above 98.00 could signal a reversal and renewed dollar strength.
hope we can get back to 100 aagin.
#dollar
