US Dollar Index (DXY) slides below 104.00; seems vulnerable to weaken further

FXStreet
Updated
Mitrade
coverImg
Source: DepositPhotos

USD kicks off the new week on a weaker note and snaps a three-day winning streak.


Bets that the Fed will resume its rate-cutting cycle soon seem to weigh on the buck.


A positive risk tone also undermines the safe-haven USD and contributes to the slide.


The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, struggles to capitalize on a three-day-old recovery from a multi-month low and attracts fresh sellers at the start of a new week. The index remains depressed through the first half of the European session and is currently placed below the 104.00 mark, down around 0.20% for the day. 


The Federal Reserve's (Fed) less dovish outlook maintained its forecast to deliver two 25 basis points rate cuts by the end of this year and gave a bump higher to its inflation projection. Investors, however, have been speculating that the US central bank will resume its rate-cutting cycle sooner than expected amid worries about a tariff-driven slowdown in US economic activity. This, in turn, is seen undermining the Greenback.


Meanwhile, Reports over the weekend indicated that US President Donald Trump is planning a narrower, more targeted agenda for the so-called reciprocal tariffs set to take effect on April 2. This boosts investors' appetite for riskier assets and turns out to be another factor denting demand for the safe-haven buck. That said, a goodish pickup in the US Treasury bond yields could help limit any meaningful downside for the USD. 


Traders now look forward to the release of the flash US PMIs, which, along with speeches by influential FOMC members, might provide some impetus to the Greenback. The focus, however, will remain glued to the US Personal Consumption Expenditure (PCE) Price Index on Friday, which could offer fresh cues about the Fed's rate-cut path and determine the next leg of a directional move for the Greenback. 

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

goTop
quote
Do you find this article useful?
Related Articles
placeholder
USD/JPY trades cautiously positive around 144.00 ahead of key US dataThe USD/JPY pair edges higher to near 143.90 during European trading hours on Thursday. The pair trades cautiously higher as the US Dollar (USD) ticks up ahead of the United States (US) Nonfarm Payrolls (NFP) data for June, which will be published at 12:30 GMT.
Author  FXStreet
14 hours ago
The USD/JPY pair edges higher to near 143.90 during European trading hours on Thursday. The pair trades cautiously higher as the US Dollar (USD) ticks up ahead of the United States (US) Nonfarm Payrolls (NFP) data for June, which will be published at 12:30 GMT.
placeholder
USD/CHF upside attempts remain limited below 0.7945 ahead of the US NFP reportThe US Dollar is trading with marginal gains for the second consecutive day on Thursday.
Author  FXStreet
15 hours ago
The US Dollar is trading with marginal gains for the second consecutive day on Thursday.
placeholder
USD/CAD Price Forecast: Remains below 1.3600 due to persistent bearish biasThe USD/CAD pair extends its losses after registering nearly 0.50% losses in the previous session, trading around 1.3590 during the European hours on Thursday.
Author  FXStreet
15 hours ago
The USD/CAD pair extends its losses after registering nearly 0.50% losses in the previous session, trading around 1.3590 during the European hours on Thursday.
placeholder
AUD/JPY treads water above 94.50 due to signs of BoJ delaying rate hikesAUD/JPY holds its positions for the second successive session, trading around 94.60 during the European hours on Thursday.
Author  FXStreet
15 hours ago
AUD/JPY holds its positions for the second successive session, trading around 94.60 during the European hours on Thursday.
placeholder
AUD/USD holds gains above 0.6560, the dollar eases ahead of the NFP reportThe Australian Dollar remains consolidating gains near the year-to-date highs at 0.6590.
Author  FXStreet
15 hours ago
The Australian Dollar remains consolidating gains near the year-to-date highs at 0.6590.
Real-time Quote