An increase of the indicator value may contribute to the rise in quotes of USD.
An increase of the indicator value may contribute to the rise in quotes of USD.
Analysts at Bank of America (BofA) consider the US economy resilient to tariff-driven pressures. Despite downgrading their forecast for the country’s GDP growth, the experts do not anticipate a recession as they expect trade tension to de-escalate and the US fiscal policy to ease.
According to Barclays analysts, carry trade deals may see a resurgence in the short term. Experts say the tension between the US and China is easing, which means less pressure on central banks to cut interest rates.
Following Moody's downgrade of the US government's credit rating, there was a significant market reaction. The yield on long-term American Treasury bonds briefly surged past the critical 5% threshold, while stock prices and the dollar declined.
US consumer sentiment hit a new low in May, largely due to President Donald Trump's new tariffs. According to Yahoo Finance, the ongoing effects of his trade policy are exerting significant pressure on the market.
On Friday, Moody's became the third agency after Fitch Ratings and S&P Global Ratings to strip the United States of its top credit rating. The organization cut its assessment of the United States' financial reliability from AAA to Aa1.
A decrease of the indicator value may contribute to the fall in quotes of USD.
An increase of the indicator value may contribute to the rise in quotes of USD.
Within the next two or three weeks, Donald Trump plans to enact more tariffs on key US trading partners, citing his administration's inability to negotiate deals with all nations simultaneously.
Atlanta Fed President Raphael Bostic announced his expectations for a slowdown in the US economy this year, but not a recession. He also anticipates just one interest rate cut in 2025.
Barclays has revised its US economic growth forecast upward, ruling out the possibility of a year-end recession. The bank's decision comes as trade tensions between Washington and Beijing ease.
The dollar is the monetary unit of the United States (US). It is also used as the official currency by some other countries (Ecuador, Zimbabwe, El Salvador). The dollar holds a leading position in the world economy.
At the moment, the dollar dominates the system of international settlements with almost 50% share (the euro ranks second with less than 25%). Meanwhile, the dollar's dominance is even more pronounced in the financial sector, on the foreign exchange market, and in the government reserves.
The US currency (USD) quotes, as well as those of its foreign counterparts, depend primarily on the economic and political situation in the issuing country. The US authorities, such as the Federal Reserve System (the Fed) and the Department of the Treasury, influence the dollar exchange rate by changing their monetary, fiscal, budget, and tax policies.
Moreover, the value of the dollar may be significantly affected by the latest news and the international situation. Global economic problems and rising geopolitical tensions have historically been favorable for the US currency, as investors consider it one of the major safe-haven assets, along with gold. In contrast, during periods of strong economic growth and a relatively calm global environment, the demand for the dollar tend to reduce.