The US Dollar Index (DXY) extended its losing streak for a third consecutive session, falling to 99.70 during the early Asian hours on Wednesday. The Greenback remains under pressure as Federal Reserve officials express increasing concern over the health of the U.S. economy, particularly in light of softening business and consumer sentiment.
The decline comes amid broader uncertainty surrounding U.S. trade policy and the lasting impact of Moody’s credit downgrade of U.S. sovereign debt.
In recent remarks:
Although some macro indicators remain stable, officials suggested that trade policy instability is fueling concern across markets and logistics networks.
On Monday, Atlanta Fed President Raphael Bostic reiterated his stance for only one rate cut in 2025, adding that tariff unpredictability from previous administrations may disrupt the U.S. supply chain — particularly in sectors reliant on imported goods.
The U.S. Dollar has remained on the defensive ever since Moody’s downgraded the U.S. long-term credit rating from Aaa to Aa1. This follows previous downgrades from:
Moody’s cited significant long-term fiscal imbalances and projected that U.S. federal debt will reach 134% of GDP by 2035, up from 98% in 2023. The agency also forecasted a 9% budget deficit, driven by:
Type | Level |
---|---|
Immediate Support | 99.50 – Psychological floor |
Deeper Support | 98.80 – Near April swing low |
Resistance | 100.40 – Former support |
Resistance | 101.25 – 50-day EMA |
Bearish Scenario:
Bullish Scenario:
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