FX.co ★ Dollar Weakens to 4-Month Low

The dollar index edged lower towards 97 on Monday, marking its third consecutive decline to reach its weakest level in four months. Notably, the dollar experienced its most significant depreciation against the yen. Concerns over a possible joint currency intervention by the United States and Japan were exacerbated by reports that the New York Federal Reserve had consulted with dealers regarding dollar/yen rates on Friday. In addition to these factors, the dollar faced downward pressures from escalating geopolitical and trade tensions, as well as increasing anticipation that President Donald Trump might soon appoint a more dovish successor to Federal Reserve Chair Jerome Powell. Initially, Trump threatened several European nations with new tariffs in a statement that coincided with his interest in acquiring Greenland. However, this stance was later reversed following a framework agreement aimed at reaching a future deal. Furthermore, Trump indicated the possibility of imposing 100% tariffs on Canada if it entered into a trade deal with China. Looking forward, the Federal Reserve is expected to maintain the current interest rates this week, with market participants paying close attention to any guidance hinting at the timing of the next rate cut.