The dollar is falling near its lowest level in three and a half years
The US dollar witnessed a noticeable decline in its value against major currencies, as it approached its lowest levels since February 2022, amid expectations of easing the monetary policy of the Federal Reserve and the effects of a huge government spending bill.
US dollar index
The dollar index, which measures the performance of the US currency against a basket of six major currencies, rose slightly to 96.80, but remained close to Tuesday's low of 96.38.
The dollar also fell against the euro to its lowest level since September 2021 and approached its lowest level against the Swiss franc since 2011.
Impact of Jerome Powell's Remarks
Federal Reserve Chairman Jerome Powell confirmed during his participation in the European Central Bank's annual conference that the US central bank is taking a cautious approach to cutting interest rates, but he did not rule out a move at the July meeting, indicating that the decision will depend on upcoming economic data.
Powell added that the US economy remains strong, but global risks, such as trade tensions and slowing growth, could affect monetary policy.
The non-farm payrolls report, scheduled for release on Thursday, is expected to be a decisive factor in guiding the Fed's decisions.
The Impact of Government Spending and Political Pressures
Another factor weighing on the dollar is the spending and tax bill passed by the US Senate, which is expected to add $3.3 trillion to the national debt.
If it is finally approved by the House of Representatives, the rising fiscal deficit could lead to further depreciation of the US currency.
US President Donald Trump's repeated criticism of Powell's policies has also negatively impacted investor confidence, raising concerns about the independence of the Federal Reserve.
Markets appear to be facing a delicate phase, where economic and political factors intertwine, making the dollar's future dependent on developments in the coming months.
Investors are awaiting economic data releases today and tomorrow, particularly private and government employment reports, to determine the dollar's future direction.
