The U.S. dollar will weaken steadily over the coming months on mounting concerns over the Federal Reserve's independence, the credibility of official statistics, ballooning fiscal debt and rising bets on interest rate cuts, a Reuters survey of foreign exchange analysts showed on Tuesday.
Underscoring those concerns, President Donald Trump's dismissal of the Bureau of Labor Statistics commissioner last week over unproven claims of data rigging - following record downward revisions to job numbers - prompted a swift reversal of recent dollar gains from Trump's tariff deal with the EU.
While there was a modest pullback from a crowded short-dollar trade, the greenback is still down nearly 9% this year against a basket of major currencies.
Trump's erratic tariff moves, repeated attacks on the U.S. central bank and Fed Chair Jerome Powell and rising debt levels have made investors rethink holding U.S. assets and raised the term premium - compensation demanded for holding long-term debt.
Reflecting that sentiment, foreign exchange strategists, who have maintained a bearish dollar outlook since at least April, forecast in an August 1-5 Reuters poll that the euro would gain around 2% to $1.17 by the end of October and continue to rise to $1.18 in six months.
The euro would then rise to $1.20 in a year - the highest survey median since October 2021.
"We've been trading in this environment of U.S. exceptionalism and the U.S. being far and away the strongest economy in the world. That just isn't the case anymore in my view," said Erik Nelson, head of G10 FX strategy at Wells Fargo.
"There are underlying structural concerns - Fed independence, data quality, you name it. When it comes to the economic backdrop, all that is heading in the wrong direction. The temptation for the foreseeable future will be to sell the dollar on rallies."
An overwhelming majority, 89 of 100 top policy experts in a separate Reuters survey, raised concerns over the accuracy of U.S. government statistics days before Trump fired BLS Commissioner Erika McEntarfer.
Source: Investing.com
The US Dollar is trading lower on Wednesday, weighed by a combination of renewed stagflation concerns following weak US macroeconomic data and investors' caution, awaiting Trump's nominee for the Fed ...
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is remaining steady after two days of slight gains and trading around 98.80 during the European...
The US Dollar Index (DXY), a measure of the value of the US dollar (USD) against a basket of six global currencies, traded slightly higher near 98.80 during Asian trading hours on Wednesday (August 6t...
Dollar steadied Tuesday, consolidating after its payrolls-inspired losses, with traders weighing up the potential for more Federal Reserve rate cuts along with a slowing economy. At 04:15 ET (08:15 G...
The US Dollar Index (DXY), a measure of the value of the US dollar (USD) against a basket of six global currencies, traded negative around 98.70 at the start of Tuesday's Asian trading session. Trader...
European shares closed flat on Wednesday, surrendering early session gains, as healthcare stocks felt the pinch from U.S. President Donald Trump's latest threat to impose higher tariffs on pharmaceutical imports. The pan-European STOXX 600 index...
Stocks in the US were mostly higher on Wednesday, with the S&P 500 up 0.1%, the Nasdaq adding 0.2% and the Dow Jones swinging around the flatline. Traders remain focused on corporate earnings and trade developments, particularly after...
Oil prices rose early on Wednesday, for the first time in five sessions, as a report showed a larger than expected drop in U.S. inventories amid strong summer demand. West Texas Intermediate crude oil for September delivery was last seen up...
European stock markets opened positively this week, with the Euro Stoxx 50 up 0.6% and the broader Stoxx 600 up 0.2%. This rebound follows a sharp...
European stocks continued their gains for a second consecutive session on Tuesday (June 5), with the STOXX 50 and STOXX 600 rising 0.4%. Investors...
The European Union will suspend its two packages of countermeasures to U.S. tariffs for six months following a deal with U.S. President Donald...
White House economic advisers on Sunday defended President Donald Trump's firing of the head of the Bureau of Labor Statistics, dismissing criticism...