Dollar Lingers Near 3½‑Year Low on Fed Rate‑Cut Bets & Trade Deals
The U.S. dollar is hovering around its lowest point in 3½ years against the euro and sterling, as markets increasingly price in deeper and earlier Fed rate cuts. Traders are influenced by weak U.S. economic data and speculation that President Trump may appoint a more dovish Fed chair, making the current Jerome Powell a “lame duck.” The dollar index is down nearly 10% YTD, driving up currencies like the Taiwanese dollar and Australian dollar. Global focus is on next U.S. core PCE inflation data and a July 9 deadline for reciprocal tariffs, as well as accelerating U.S.–China rare‑earth trade talks—all potential impacts on the dollar.
🟡 Why it matters: A weaker dollar boosts earnings for U.S. multinationals and pushes commodity and emerging‑market assets higher—but it can also stoke inflation through pricier imports.
🔎 Extra insight: Germany is advocating for a swift trade deal with the U.S., and rare‑earth shipments from China to the U.S. are being expedited—factors that can shift currency flows
