US Dollar Set for Biggest Weekly Drop as Shutdown and Trade Worries Hit Confidence.
The US dollar is heading for its biggest weekly fall in almost three months, as fears of a US government shutdown and rising global trade tensions hurt investor confidence.
The ongoing shutdown has already delayed several important economic reports, leaving traders unsure about the real health of the US economy. At the same time, recent data showing slower growth and weaker consumer spending have added to the pressure on the greenback.
Because of this uncertainty, investors are moving away from the dollar and turning toward gold, cryptocurrencies, and other safe assets. The US dollar index has dropped about 0.1% on the day and is down nearly 0.7% this week.
Meanwhile, other major currencies are gaining ground. The Japanese yen strengthened after the Bank of Japan hinted at possible interest rate hikes, while the Euro and British Pound also edged higher against the dollar.
Although the Federal Reserve remains unclear about when it might cut rates, signs of a slowing economy are making markets expect easier monetary policy in the coming months.
Impact:
If trade and shutdown worries continue, the US dollar might fall further. But if new data or Fed actions turn positive, it could recover slightly.
