FX.co ★ Dollar Holds Near 3-Year Lows

The US dollar index stood around 97.2 on Monday, marking its lowest point since February 2022. This comes as markets are adjusting to a more dovish perspective from the Federal Reserve, growing fiscal challenges, and persisting trade uncertainties. Investors are keenly observing the upcoming US employment data this week, which might indicate a weakening in the labor market, potentially reinforcing the rationale for a rate cut as soon as July. Although the Fed has previously highlighted the strength of the labor market as justification for a cautious approach, a disappointing June jobs report could expedite policy adjustments. Meanwhile, attention remains fixed on the comprehensive tax and spending legislation currently being discussed in the Senate, which is expected to increase the national debt by $3.3 trillion and further impact market sentiment. On the geopolitical stage, the maintained ceasefire between Israel and Iran is reducing global tensions and diminishing the demand for the dollar as a safe haven.