FX.co ★ Dollar Heads for Second Weekly Drop

The dollar index approached 96.5 on Friday but remained set for its second consecutive weekly decline. Heightened geopolitical tensions combined with shifting policies in Washington were influencing investor confidence in the reserve currency. Notably, President Donald Trump's recent threats included imposing tariffs on oil-exporting countries to Cuba and warning Iran of potential military action unless it consents to a nuclear deal. Concurrently, Trump announced his intention to disclose his nominee for the Federal Reserve Chair on Friday morning, following his prolonged campaign to pressure Powell into more aggressive reductions in borrowing costs. Additionally, the White House and Senate Democrats have reached a provisional agreement to prevent a US government shutdown. Earlier in the week, the dollar plunged to a four-year low after Trump exhibited minimal concern over its weakness. This was later countered by Treasury Secretary Scott Bessent's reaffirmation of the US commitment to maintaining a strong dollar policy.