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US Dollar resides near five-day low as traders gauge progress in trade talks, Fed policy
Wednesday, 7 May 2025 20:06 WIB | US DOLLAR |DOLLAR

The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against six major currencies, trades broadly flat on Wednesday at around 99.40 after printing a fresh five-day low on Tuesday and looks to be on pause for now.

Traders are meanwhile assessing news about progress between China and the US regarding trade talks and brace for the Federal Reserve (Fed) interest-rate decision later this Wednesday.

Not much is expected from this rate decision as markets almost fully price in that the Fed will keep rates stable despite pressure from US President Donald Trump to cut them.

On the geopolitical front,  tensions flared up between Pakistan and India. Pakistan said it shot down five Indian airplanes and took soldiers prisoner in retaliation for Indian military strikes early on Wednesday. The prospect of a war between the nuclear-armed neighbors should see some safe haven inflow towards US bonds or Gold, for example, although any added haven demand is, at this stage, being canceled out by the trade talks optimism, Bloomberg reports.

Source: FXStreet

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