From Yahoo Finance: 2025-05-19 19:15:00

Trade-related uncertainties, fiscal debt, and waning confidence in U.S. assets have led to the dollar’s decline. Moody’s credit downgrade and high valuation have contributed to the currency’s fall, with speculators net short on the dollar. Analysts predict further weakening, fueled by long-term concerns about U.S. fiscal policy.

Despite Trump’s support for a strong dollar, foreign selling and doubts about the dollar’s haven status have led to concerns. The recent failure of the dollar as a safe haven has prompted investors to reevaluate their portfolios, potentially leading to significant selling of U.S. assets. Increased hedging could further pressure the dollar in global markets.

Asian economies with massive USD exposure could pose risks to the dollar as investors shift away from U.S. assets. The resilience of the U.S. economy remains a counter-argument to the bearish dollar story, with potential economic growth supporting the dollar. However, investors are more inclined to sell rallies in the dollar than bet on a rebound, looking for opportunities to capitalize on its weakness.

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