The US dollar declined in European trade on Monday against a basket of major rivals, on track for the sixth loss in a row, about to plumb four-month lows amid concerns about US growth due to Trump’s trade policies.
The US economy added less jobs than expected in February, bolstering the odds of a Fed rate cut during the first half of the year, with traders now waiting for US inflation data this week to gather more clues.
The Index
The dollar index fell 0.35% today to 103.56, with a session-high at 104.03.
On Friday, the index lost 0.25%, the fifth loss in a row, plumbing four-month lows at 103.46 following weak US labor data.
The index lost 3.4% last week, the fourth weekly loss in five weeks, and the heftiest since November 2022.
Growth Concerns
Investors are worried about slower US growth after aggressive tariffs on major trade partners, while recent labor data and government layoffs raised more concerns.
US Treasury Secretary Scott Bessent said the economy might slow down as it shifts from government spending to private investments, and reaches a more sustainable balance.
He believes that some tariff levels will always be necessary to fix some economic imbalances around the world and secure more stable supply chains.
President Trump said during a Fox News interview that the US is undergoing a transition phase, with return of wealth to the US through trade and economic policies, including tariffs to boost local industry.
US Rates
Fed Chair Jerome Powell said it remains to be seen whether Trump’s tariff plans will be inflationary.
According to the Fedwatch tool, the odds of a Fed 0.25% rate cut in March stood at just 3%.
Now investors await important US inflation data this week to gather more clues.
