Location & Language

Zenfinex Global Limited regulated by the Financial Services Authority (FSA) of Seychelles (SD092)

Weakening U.S. Dollar Amid Declining Bond Yields and Weak Economic Indicators

After reaching its highest level this year at 110.17 points on January 13, 2025, the U.S. Dollar Index, which measures the dollar’s performance against a basket of six currencies, has declined to 106.12 points over the past two days, marking its lowest level since December 10, 2024—a drop of approximately 4%. Currently, the index is trading around 106.50 points, down by about 2% since the beginning of the year.

The decline in the U.S. Dollar Index can be attributed to several factors, including:
• A decrease in U.S. Treasury yields across various maturities. The yield on the two-year Treasury notes, which is highly sensitive to Federal Reserve policy, stood at 4.076% yesterday, its lowest level since December 6, 2024. Meanwhile, the yield on the ten-year Treasury notes, which is more influenced by U.S. fiscal policy, fell to 4.302%, its lowest since December 12, 2024.
• Weak U.S. economic indicators in recent weeks, such as a decline in existing home sales, a drop in the University of Michigan Consumer Sentiment Index, and a decrease in overall consumer confidence. Additionally, the Services PMI recorded a contraction at 49.7 points, marking its lowest level since January 2023.

The key question now is whether the U.S. dollar will rebound soon, especially in light of the Trump administration’s threats to impose tariffs on imported goods, particularly from the European Union, Canada, Mexico, and China. Such measures could fuel U.S. inflation, potentially pressuring the Federal Reserve to keep interest rates elevated for a longer period—or even raise them—thereby providing a positive boost for the dollar.

From a technical standpoint, the 50-day moving average, which stands at 108.02 points, has been breached, along with the support level represented by the 100-day moving average at 106.60 points. This suggests a weak start for the U.S. Dollar Index in 2025. Additionally, a bearish crossover has occurred between the 20-day moving average (currently at 107.40 points) and the 50-day moving average, signaling a negative outlook for the greenback. The Relative Strength Index (RSI) currently stands at 39 points, indicating negative momentum for the index. Similarly, the MACD indicator shows the blue line below the orange Signal Line, reinforcing the bearish sentiment for the U.S. dollar.

Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.

Back

Popular Posts

Swiss National Bank Cuts Interest Rate to Zero… Will Negative Rates Return Soon?

Will the Bank of England Keep Rates Steady? Sterling in the Spotlight

Continued Weakness of the Turkish Lira Against the Dollar Amid Economic Slowdown

USD/NOK Pair Declines to Its Lowest Level Since January 30, 2023

Lorem Ipsum

Lorem ipsum dolor sit amet, consectetur adipiscing elit.

Here are some related articles you may find interesting:

Market Insights​

June 20, 2025

Swiss National Bank Cuts Interest Rate to Zero… Will Negative...

The Swiss National Bank (SNB) decided yesterday to cut interest rates by 25 basis points, as expected, from 0.25% to 0.0%, marking the sixth consecutive...

Market Insights​

June 19, 2025

Will the Bank of England Keep Rates Steady? Sterling in...

GBP/USD reached 1.3632 on Friday, June 13, 2025 — its highest level since February 21, 2022. The pair has climbed nearly 13% from its January...

Market Insights​

June 18, 2025

Continued Weakness of the Turkish Lira Against the Dollar Amid...

The USD/TRY exchange rate recorded a level of 39.5191 today — its highest level since March 19, 2025, when it reached around 41.00. The pair...

Market Insights​

June 17, 2025

USD/NOK Pair Declines to Its Lowest Level Since January 30,...

The USD/NOK pair continues its downward trend, recording 9.8642 yesterday — the lowest level since January 30, 2023. The pair has declined by approximately 13%...

Ready to Elevate Your Trading Journey?

Open a Taurex account and start trading today.

We’re Sorry

Access to tradetaurex.com
is unavailable in your region

tradetaurex.com is required to abide by global laws and therefore the information on this site is not directed at residents of the United States, Canada, North Korea, Iran, Myanmar, Belgium, Spain, France, Japan, South Korea or any particular countries and is not intended for distribution to, or use by, any person in an country or jurisdiction where such distribution or use would be contrary to local law or regulation.

Live account Registration

1 Hour Trading Consultation

Chat on WhatsApp