Traders remain bearish on dollar — Bloomberg

In recent months, trader sentiment towards the dollar has deteriorated. US President Donald Trump has repeatedly challenged markets by casting doubt on the country’s economic growth prospects, Bloomberg reports. The cost of buying versus selling greenback options has already plunged to -27 basis points, its lowest level since 2011.

The Bloomberg Dollar Spot Index continues to decline despite easing trade tensions between the US and China. The gauge has dropped 6% year-to-date, marking its worst performance since its launching 20 years ago. On Tuesday, it fell another 0.2%.

According to strategists at Charles Schwab & Co., the dollar's bearish trend still persists as the US-China trade truce is only temporary in nature.

Another factor weighing on the US currency is America's fiscal policy. Donald Trump's tax package winds its way through Congress, and its implementation could substantially widen the federal budget deficit.

Bloomberg notes that the dollar's decline was further compounded by Moody's downgrade of America's credit rating.