Dollar Index Drops Below 98 for First Time Since Early 2022
The dollar index (DXY) fell below 98, marking its lowest level since early 2022. This decline indicates a shift in global currency markets, potentially benefiting risk assets like cryptocurrencies.
- A DXY above 100 has generally indicated dollar strength and risk-off sentiment, negatively impacting equities and digital assets.
- A weaker dollar improves financial conditions and enhances global liquidity, favoring speculative investments.
- US headline inflation is at 2.4% year-over-year, slightly below forecasts, which supports expectations for a dovish monetary policy shift.
- The CME FedWatch Tool shows a 99.8% probability of a rate cut at the June Federal Reserve meeting, with a target range of 4.25 to 4.50 percent.
- Narratives around de-dollarization and trade policy uncertainty have contributed to declining confidence in the dollar.