According to Odaily, the US dollar is on track for its largest weekly decline in three months as investors begin to question the so-called 'Trump trade' that has driven the dollar's strength since the US election. On Friday, during the Asian trading session, the dollar index (DXY) fell nearly 0.2%, expanding its weekly loss to 1.1%. Throughout the week, the dollar weakened against all G10 currencies, with the most significant drop against the Japanese yen.
Mingze Wu, a foreign exchange trader at Singapore's StoneX Financial, noted that the market is still struggling to determine the dollar's trajectory. "We expect the dollar to experience sideways movement until Trump is inaugurated in January next year. Once Trump announces his policies, the dollar's direction will become clearer," Wu stated. Posts by Trump on social media have begun to disrupt financial markets, raising concerns that his policies might ultimately harm the world's largest economy, causing the dollar's eight-week rally to stall.
An index by Citigroup, which tracks dollar positions in foreign exchange funds, climbed to its highest level since August 2023 this week, indicating that long positions might be overextended.