FX.co ★ Dollar Approaches 2022-Lows Again

At the onset of June, the US dollar index saw a continuation of its downward trend, dipping below the 98.7 mark, reminiscent of the three-year lows reached in April, following a modest decline at the end of May. This drop was influenced by escalating trade uncertainty and a surge in risk-averse sentiment triggered by disappointing economic data. Market participants analyzed the latest ISM Manufacturing PMI report, which revealed a more pronounced contraction in the sector than anticipated, marking the third consecutive month of decline. Concurrently, trade tensions intensified. China accused the United States of breaching their recent trade agreement, pledging retaliatory actions to safeguard its interests. This accusation mirrored those made the previous week by President Trump, who alleged that China had violated the terms of the agreement. Simultaneously, tensions with the European Union heightened, as President Trump announced intentions to increase tariffs on steel and aluminum to 50%. The dollar's value declined broadly, with noticeable decreases against the yen, the euro, and the Australian dollar.