ING expert predicts dollar decline amid concerns over US tariff and tax policy

Earlier this week it was reported that the introduction of US tariffs against the European Union had been postponed until July 9. However, this temporary pause failed to provide sufficient support for the dollar, and the US currency weakened. According to ING expert Francesco Pesole, this trend stems from lingering market anxiety over Donald Trump’s unpredictable trade policy, which first emerged in April. He argues that traders have been reminded how abruptly American import restrictions can be both set and lifted.

The dollar is also under pressure due to concerns about a sharp rise in U.S. national debt resulting from the new administration’s tax reforms. Given these conditions, ING analysts now forecast further dollar depreciation, as investors increasingly question its status as the world’s reserve currency. Nevertheless, Pesole believes the dollar remains undervalued overall.

Under current circumstances, the US currency may be supported by strong arguments of the national economy’s resilience and the country’s creditworthiness, ING emphasizes.