The dollar slumped to its lowest levels in several weeks against a basket of major currencies on Friday, pressured by growing expectations that the Federal Reserve might slow down its pace of interest rate increases. Concerns surrounding global economic growth and ongoing trade disputes further contributed to the dollar’s decline.

Factors Influencing the Dollar’s Weakness

• Federal Reserve Policy: Market participants are increasingly pricing in a more dovish stance from the Federal Reserve, anticipating fewer rate hikes in the coming year.
• Global Economic Growth: Worries about a potential slowdown in global economic growth are dampening risk appetite and weighing on the dollar.
• Trade Tensions: The ongoing trade conflict between the United States and other major economies continues to create uncertainty and negatively impact the dollar.

Analyst Commentary

Analysts suggest that the dollar’s weakness could persist in the near term, especially if upcoming economic data confirms a slowing U.S. economy. However, some believe that the dollar could find support if the Fed maintains its hawkish stance or if trade tensions ease.

Key Economic Data to Watch

Investors will be closely monitoring upcoming economic releases, including inflation figures and employment data, for further insights into the health of the U.S. economy and the Fed’s likely policy response.