Analyst: Fed's Dovish Signals Could Trigger New Round of Dollar Sell-Off

Odaily News FXEM analyst Abdelaziz Albogdady stated that although the US dollar has stabilized after falling to multi-year lows, it continues to face downside risks. The weakening of the dollar is primarily due to Trump's remarks signaling tolerance for currency depreciation. The market is also increasingly concerned that Trump may nominate a more dovish Federal Reserve Chair, which could imply looser monetary policy and diminished institutional independence. Coupled with widespread unease over domestic political risks in the US (particularly the rising possibility of a government shutdown), the dollar remains under sustained pressure. As the market has largely priced in expectations that the Fed will hold rates steady, the focus has completely shifted to forward guidance. Any dovish inclination could intensify the downward pressure on the US dollar and Treasury yields. (Jin10)