The US dollar index is on track for its worst weekly performance since November 2022, amid growing concerns that the US administration's trade policies could slow economic growth in the country, Bloomberg reports.
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Record fall of the dollar index
The dollar spot index, which measures its value against a basket of other currencies, fell 2.4%, its biggest weekly drop since November 2022.
US Labor Market: Employment Growth and Unemployment Rise
The negative trend for the dollar is observed despite the stable growth of jobs in the US. At the same time, the unemployment rate in the country has increased, which indicates a certain weakening of the labor market.
US Bond Yields Fall and Monetary Policy Easing Expectations
An additional factor putting pressure on the dollar was the decline in the yield on US government bonds. This in turn increases the likelihood of the US Federal Reserve System easing monetary policy.
Changes in German fiscal policy and their impact on the euro
“Significant changes in German fiscal policy have raised expectations for eurozone growth. This has come at a time when concerns about the US growth outlook have increased,” said State Street strategist Lee Ferrige.
Euro posts best week in 15 years
The strengthening of the euro, driven in particular by positive expectations for the Eurozone economy, also contributed to the weakening of the dollar. The euro is on track for its best weekly performance since 2009.
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