U.S. Dollar Index Falls to 98 Amid Trade Tensions and Rate Cut Expectations
The U.S. Dollar Index dropped to 98 on Monday (22), marking its second consecutive session of decline as markets turned their attention to key global trade developments, domestic economic indicators, and Federal Reserve policy signals.
Commerce Secretary Howard Lutnick reaffirmed that August 1 remains a "hard deadline" for countries to begin paying newly imposed tariffs. However, he emphasized that negotiations will continue up until that date, keeping investors on edge.
On the monetary policy front, Federal Reserve Governor Christopher Waller reiterated his support for a rate cut in July, citing signs of a weakening labor market and moderate inflation risks. He downplayed the inflationary impact of the tariffs, describing it as temporary, and said there are no indications that inflation expectations are rising — giving the Fed more room to ease.
Investors are also awaiting the June reading of key leading indicators, which are expected to provide broader insights into the economic outlook for the second half of the year.
Meanwhile, the dollar dipped slightly against the Japanese yen after Japan’s ruling coalition suffered a historic defeat in the upper house election, increasing political uncertainty and boosting demand for safe-haven assets.
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NEWSROOM
