Dollar Fights to Regain Strength Amid U.S.-China Trade Tensions

DOLLAR INDEX

The U.S. Dollar Index is trading below the resistance level of $100.00, and prices are likely to move sideways between the support level of $97.40 and the aforementioned resistance level.

The U.S. Dollar Index has experienced a sharp decline, falling by 8.4% since the beginning of the year—marking its worst performance since 1989. This drop is largely attributed to the controversial policies of the Trump administration, including the imposition of trade restrictions, criticism of state institutions, and the proposal to withdraw from the International Monetary Fund (IMF), all of which have raised concerns about the future of the dollar as a global reserve currency.

The potential U.S. withdrawal from the IMF could exclude the dollar from the fund’s international transactions, paving the way for the rise of other currencies such as the euro and the yuan. Additionally, global trade tensions and economic volatility have added pressure on the dollar, causing it to lose much of its momentum in global financial markets.

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