FX.co ★ DXY Falls for 5th Session, Down Almost 2% this Week

The dollar index experienced a decline, reaching 97.1 on Friday, marking its lowest point since February 2022. This contributes to an almost 2% drop this week, fueled by growing anticipations of Federal Reserve interest rate cuts. In recent congressional testimony, Fed Chair Powell adopted a notably dovish stance, indicating that without inflationary pressures from tariffs, the Fed would have maintained its rate-cutting trajectory. Additionally, reports have surfaced suggesting that President Trump might nominate a successor for the Fed Chair as soon as September or October. This could potentially establish a "shadow" leadership structure, steering monetary policy towards a more dovish approach. Concurrently, U.S. economic figures revealed a 0.3% decrease in personal consumption expenditures for May, marking the steepest decline this year. The Fed’s preferred inflation measure, the core Personal Consumption Expenditures (excluding food and energy), increased by 0.2%, slightly surpassing expectations. Consequently, the dollar has weakened to its lowest point in three and a half years against the euro and the British pound, while also reaching multi-month lows against other currencies.