Us Dollar Remains Weak

last updated on

Us Dollar Remains Weak

Us Dollar Will Remain In Downtrend

The performance of the US Dollar against the Euro & other currencies is not that impressive at all. In fact, the greenback is at its lowest level against the EURO.

Data shows that the last time the US Dollar was this weak against the Euro was in the 1970s. Based on all of this, Commerzbank analysts forecast that the US Dollar will remain in a downtrend for the next few months.

Us Fed To Remain Cautious

The recent data is a little positive for the US Dollar, and this has helped the currency to gain ground. In addition, inflation is also expected to increase slightly, which will make the Fed more cautious about its interest rate policy.

Another factor that will affect the US Dollar a lot is the tariff situation. There's no doubt that the US government wants to move manufacturing back to the country, but that will take several years.

In the meantime, tariffs will only fuel the inflation, which will in turn stop the Fed from lowering the rates. This narrative has helped the US Dollar to gain some strength, but it will not last long term.

better look at the charts shows that the US Dollar is down by 13% against the EURO during 1H2025. So, even if we get a rebound of around 2%, it shouldn't come as a surprise.

Meanwhile, the US government appears to be testing the market with its comments. The US government has once again discussed the possibility of dismissing the Fed chairman.

In a sense, this is the US government's attempt to diminish the independence of the Federal Reserve. If this continues for the long term, it will have catastrophic effects on the US Dollar.

Given all of this, Commerzbank believes that the US Dollar will remain in a long-term downtrend against the EURO and other major currencies. In other words, we can expect more downside in the US Dollar despite the Fed's hesitation to lower the rates.

Trending Stories