Dollar Extend Losses Weakens as Debt Concerns Intensify

Fundamental Analysis

The U.S. Dollar Index extended its losses as investors continued to react to Moody’s recent downgrade of the U.S. sovereign credit rating, citing unsustainable fiscal dynamics. Weaker economic data, combined with escalating trade uncertainties, have further fueled structural headwinds for the greenback. Adding to investor anxiety, former President Donald Trump’s newly proposed tax and spending bill—which aims to extend the 2017 tax cuts—is projected by analysts to increase U.S. debt by at least $3 trillion over the next decade. This has deepened market skepticism over the long-term sustainability of the U.S. fiscal outlook.

U.S. equity markets also retreated amid rising Treasury yields, following a poorly received 20-year bond auction that reflected weak investor demand. The bond market reaction, coupled with Moody’s downgrade and ongoing Congressional divisions over Trump’s fiscal package, underscores growing discomfort over the nation’s fiscal trajectory. The bill, which faces a key test in the House of Representatives this week, could potentially add $3 to $5 trillion to the existing $36.2 trillion debt burden—triggering further credit concerns and risk aversion.

Technical Analysis – Dollar Index

DOLLAR_,INDEX, 4-Hour Chart:

The Dollar Index is trading lower, currently testing a key support level near 99.25. The bearish sentiment is underpinned by negative fundamentals, and a successful breakout below this level could pave the way for further downside toward the next support at 98.00.

However, from a technical perspective, the MACD is showing signs of diminishing bearish momentum, while the RSI has dropped to 33—indicating that the index has entered oversold territory. This suggests that a technical correction or short-term rebound may be possible before the broader downtrend resumes.

Resistance Levels: 100.30, 101.90
Support Levels: 99.25, 98.00

Risk Warning: Trading Contracts for Difference (CFDs) involves a high level of risk and may not be suitable for all traders. The use of leverage magnifies both potential profits and losses, meaning you could incur losses greater than your initial deposit. It is important to understand the risks involved and assess whether you can afford to lose your invested capital. When trading CFDs, you do not own the underlying assets and have no rights to them. Past performance is not indicative of future results. The information provided on this website is for general informational purposes only and does not constitute investment advice, recommendation, or solicitation to engage in any investment activities. It does not take into account your personal financial circumstances, investment objectives, or risk tolerance. Any interaction with this website is an individual and voluntary action on the part of the user. The content on this website should not be construed as an invitation to enter into or acquire PU Prime’s financial services and products. Under no circumstances shall the Company be held liable for any loss or damage, in whole or in part, arising from, or in connection with, any CFD trading activities. Please review the legal documents available on our website to ensure that you fully understand the risks associated with CFD trading. If necessary, seek independent advice from qualified professionals.

Regional Restrictions: This information on this website is not intended for distribution to, or use by, any person or entity who is a citizen or resident of certain jurisdictions, including, but not limited to, Singapore, the United States, China, and jurisdictions listed on the FATF “blacklist”, and the major global sanctions lists. It is also not intended for distribution or use in any jurisdiction where such distribution or use would violate local laws or regulations.

PU Prime is a trading name for multiple licensed entities operating across different jurisdictions, each authorised to provide specific financial services in accordance with local regulations. Upon registration, you will be assigned to the entity that corresponds with your location and complies with the applicable regulatory requirements. The entity you are registered with will govern your trading activities, which will be subject to the oversight and regulations of its respective regulatory authority. While these authorities have granted a securities or investment dealer license to the respective entity, they do not endorse the products offered.

PU Prime Limited is securities dealer authorised and regulated by the Financial Services Authority of Seychelles under License No. SD050, with its registered address at CT House, Office 9A, Providence, Mahe, Seychelles.

PU Prime Ltd is an investment dealer authorised and regulated by the Financial Services Commission of Mauritius under License No. GB23202672, with registered address at Suite 201 Level 2, The Catalyst, Cybercity Ebene, Mauritius.

PU Prime (Pty) Ltd is a financial service provider authorised and regulated by the Financial Sector Conduct Authority of South Africa under FSP No. 52218, with registered address at 37 Harley Street, Ferndale, Randburg, Gauteng 2194, South Africa.

PU Prime Trading Pty Ltd is an Australian financial services licensee authorised and regulated by the Australian Securities and Investments Commission of Australia under License No. 410681, with its registered address at Suite 103, Level 1, 17 Castlereagh St, Sydney, NSW 2000, Australia. For Australian clients who have onboarded through https://www.puprime.au, the product issuer is PU Prime Trading Pty Ltd.

Finzero Cap Ltd. is registered in the Republic of Cyprus under registration number HE414308. Its registered office is located at Archiepiskopou Makariou III, 160-1st floor, 3026, Limassol, Cyprus.

Dollar Extend Losses Weakens as Debt Concerns Intensify

Fundamental Analysis

Technical Analysis – Dollar Index

Starten Sie mit einem Vorteil in das Trading

Latest Posts

Schnelle und einfache Kontoeröffnung

Registrieren Sie sich

Zahlen Sie Geld ein

Beginnen Sie mit dem Trading