- US Dollar Index weakens as US trade uncertainty and weak economic data weighed on sentiment.
- President Trump said that he will raise global import tariffs to 15% from 10% after the Court struck down his trade agenda.
- The US economy grew 1.4% in Q4 2025, while annual core PCE rose 3.0% in December, signaling persistent inflation pressures.
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, extends its losses for the second successive session, trading around 97.50 during the Asian hours on Monday.
The dollar index weakened against major currencies as persistent uncertainty around the United States (US) trade policy and disappointing economic data weighed on investor sentiment. Recent legal and policy developments have compounded confusion over the outlook for tariffs and growth.
Global markets remain on edge after the US Supreme Court struck down most of President Donald Trump’s emergency tariff authority, limiting the use of emergency powers to impose broad reciprocal tariffs. In response, Trump announced plans to pursue a new 15% global tariff under alternative trade statutes, prolonging trade policy ambiguity.
On the economic front, US data added to the dollar’s downward pressure. The economy grew at an annualized 1.4% in Q4 2025, well below expectations, while core PCE inflation climbed to 3.0% year-over-year in December, reinforcing the view that inflation remains sticky and complicating the Federal Reserve’s (Fed) policy outlook.
While the weaker US Dollar reflects easing concerns about tariff-driven inflation and slower growth, downside may be limited by broader risk aversion, including lingering tensions between the US and Iran, which continue to influence safe-haven flows.
The New York Times reported on Sunday that Trump is weighing limited airstrikes on Iran. He indicated that if diplomatic efforts or an initial targeted US strike fail to persuade Iran to abandon its nuclear program, a broader attack could be considered in the coming months.
