US Dollar Index (DXY)

Dollar index Reasons for continued declines

The US dollar index is still trading below the 100 level, after rising above during the Asian trading period on Tuesday morning, and this decline comes in the absence of any concrete developments regarding trade negotiations between the United States and its partners, which returned the markets to a state of caution and anxiety amid anticipation of any new news that may change the course of events.

Optimism had prevailed in the markets earlier last week, after Beijing announced its readiness to consider Washington's offer to resume trade talks, However this optimism soon receded, to be replaced by an atmosphere of anticipation, especially with the absence of actual steps on the ground.

The rise of Asian currencies

Asian currencies have seen a strong performance since the beginning of this week, making notable gains against the US dollar.

These gains were led by both the Taiwan currency and the Malaysian dollar, as the Taiwanese dollar climbed to its highest levels in three years during trading on Monday, increasing speculation that this rise may be part of a strategic move to support trade negotiations with the United States.

Federal meeting

Investors are currently turning their attention to the Federal Reserve meeting scheduled for tomorrow, Wednesday.

Despite the widespread expectations that the bank will keep interest rates unchanged, the focus will be on the statements of Fed Chairman Jerome Powell to extract any signals regarding the course of monetary policy in the coming period, especially in light of escalating trade tensions and increasing pressure from US President Donald Trump to cut interest rates.

With the continuing uncertainty on the global economic scene, the US dollar remains hostage to market fluctuations and reactions related to any developments in the international trade file or the Fed's upcoming policies.