The US Dollar Index held steady at 99.4 on Friday, on track for its fifth consecutive monthly decline—the longest downturn in five years. Market participants are increasingly cautious, fearing that President Trump's trade policies may pose risks to the economy and diminish the dollar's traditional status as a safe-haven currency. Heightening trade tensions, President Trump accused China of reneging on a recent trade agreement.
On the economic data front, American consumer spending showed signs of deceleration in April, with inflation-adjusted personal expenditures growing by a mere 0.1%, down from a 0.7% increase in March. Core inflation experienced a 2.5% year-on-year rise, marking the smallest increase in over four years, reflecting increased consumer anxiety and a decelerating economy. Earlier in the week, data revealed that the US economy contracted in the first quarter, the first such contraction observed in three years. In contrast, the goods trade deficit witnessed a significant reduction in April, buoyed by a record decline in imports.
