Dollar Index Weakens as Fiscal Uncertainty Weighs on Investor Confidence

Fundamental Analysis

The US dollar came under renewed pressure on Tuesday as concerns over the country’s fiscal sustainability overshadowed investor sentiment. The Dollar Index (DXY), which tracks the greenback against six major peers, extended its losses after Moody’s downgraded US sovereign credit ratings, citing unsustainable debt dynamics and growing deficits.

Sentiment was further dampened by political gridlock surrounding the controversial tax and spending bill proposed by former President Donald Trump. The bill narrowly cleared the House of Representatives by a single vote and now heads to the Senate, where fierce debate is expected. While Republicans maintain a slim majority, analysts remain concerned about the long-term implications of the proposed $3.8 trillion addition to the national debt, which currently stands at $36.2 trillion.

The rising fiscal burden has already driven long-term Treasury yields higher, reflecting market anxiety over future debt servicing costs. Analysts warn that continued fiscal expansion without credible deficit reduction plans could undermine the dollar’s status as a safe-haven currency, especially amid rising global alternatives.

Technical Analysis – Dollar Index

DOLLAR_INDEX, 4-Hour Chart:

The DXY is now trading near its immediate support at 98.90. Momentum indicators signal further downside risk, with MACD showing strengthening bearish momentum and RSI dipping to 26, indicating deeply oversold conditions.

A clear break below 98.90 could open the door to a test of the 98.00 level. However, oversold signals could invite near-term profit-taking or a technical rebound.
Resistance levels: 100.30, 101.90
Support levels: 98.90, 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 Index Weakens as Fiscal Uncertainty Weighs on Investor Confidence

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