FX.co ★ Dollar Index Falls to 100.1

The dollar index declined approximately 0.7% to 100.1 on Monday, marking its continued retreat from the one-month highs observed the previous week. This shift reflects increasing concerns about the US fiscal situation, prompting investors to move away from dollar-denominated assets. Last Friday, Moody's downgraded the US credit rating from Aaa to Aa1, pointing to escalating government debt and a growing budget deficit as key reasons. These fiscal worries intensified after a key congressional committee approved President Trump's tax-cut legislation on Sunday. The legislation introduces several hundred billion dollars in new tax cuts without equivalent spending reductions. Despite facing criticism, the Trump administration contends that these tax cuts will stimulate economic growth, increase revenues, and eventually contribute to reducing the deficit. Meanwhile, in terms of monetary policy, the market continues to anticipate two interest rate cuts by the Federal Reserve this year, expecting adjustments in September and December. The dollar experienced broad weakening, with the most significant drops against the euro and the British pound.