The dollar is approaching its lowest levels since the beginning of the year: analysis and forecast

The US dollar is experiencing a significant decline for the third week in a row, reaching levels close to its lows since the beginning of the year.

This decline comes in light of the losses incurred by the dollar during recent trading, which raised questions about the future of the US currency and the impact of trade policies on its performance.

Trade policies and the decline of the dollar

One of the main factors affecting the performance of the dollar is the recent developments in the trade policies of US President Donald Trump, Trump imposed an additional 10% tariff on Chinese goods, raising fears of a global trade war.

However, he suspended the threatened tariffs on Canada and Mexico, showing some kind of caution in his trade policies, while his other statements about tariffs are still just threats so far.

The minutes of the last FOMC meeting on this cautious approach, noting the lack of immediate urgency to ease monetary policy in light of uncertain economic prospects.

The impact of the Federal Reserve on currency markets

The Fed remains a key player in determining dollar trends, this more cautious trade policy may ease concerns about inflationary pressures, providing the Fed with more room to cut interest rates.

Meanwhile, the minutes of the latest FOMC meeting confirmed the cautious approach of the Fed, indicating that there is no immediate urgency to ease policy amid an uncertain economic outlook.

Upcoming economic indicators

Traders are now focusing on the upcoming economic data, especially the readings of the Purchasing Managers Index (PMI) and existing home sales data.

These indicators will provide important insights into the health of the US economy.