The U.S. dollar fell further on Friday, extending its weekly losses. The dollar index, which measures the greenback against a basket of six major currencies, dropped 0.3 percent to 97.05, its lowest level since late April. The index has now lost 0.8 percent for the week, its third consecutive weekly decline.
The dollar’s decline has been driven by a combination of factors, including a strengthening euro, a weakening U.S. economy, and a dovish Federal Reserve. The euro has been buoyed by strong economic data from the Eurozone, while the U.S. economy has been weighed down by weak retail sales and manufacturing data.
The Federal Reserve has also been a major factor in the dollar’s decline. The central bank has signaled that it is in no rush to raise interest rates, which has weighed on the dollar as investors look for higher yields elsewhere. The Fed’s dovish stance has been further reinforced by the recent appointment of two new Fed governors who are seen as more dovish than their predecessors.
The dollar’s decline has been exacerbated by the ongoing trade tensions between the U.S. and China. The two countries have imposed tariffs on each other’s goods, which has weighed on global growth and weakened demand for the dollar.
The dollar’s decline is likely to continue in the near term as investors remain cautious about the outlook for the U.S. economy and global trade tensions remain unresolved. However, if the U.S. economy shows signs of improvement and the trade tensions are resolved, then the dollar could stage a recovery.
Source: Plato Data Intelligence: PlatoAiStream
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