The U.S. dollar extended its decline as mixed economic data and uncertainty over Federal Reserve policy weighed on investor sentiment. Global market dynamics, including a potential slowdown in major economies and shifting risk preferences, added pressure to the greenback. Analysts noted that weaker-than-expected manufacturing data and hints of softer inflation reinforced expectations that the Fed may pause rate hikes in upcoming meetings.
Source – FXStreet
Meanwhile, global currencies, particularly in emerging markets, gained traction as investors shifted focus toward riskier assets. This trend coincides with ongoing geopolitical concerns, which have heightened demand for diversification away from the dollar. The weakening trajectory also reflects skepticism about the U.S. economy’s resilience in navigating inflationary pressures and fiscal challenges.
While the dollar’s downtrend raises questions about its long-term dominance, traders remain cautious, closely monitoring Fed policy announcements and economic releases. Global currency markets are poised for increased volatility as conflicting signals from policymakers and economic indicators shape the outlook.
