The U.S. dollar maintains low levels not seen in over two years as Federal Reserve Chair Jerome Powell‘s dovish remarks and concerns surrounding surging government debt weigh it down.

Dollar Performance Against Major Currencies

• The dollar index swayed around 96.74, not far from Tuesday’s low of 96.37, its weakest since February 2022.
• Near its lowest against the euro since September 2021.
• The dollar hovered close to levels unseen since January 2015 against the Swiss franc.

These declines reflect a significant shift in market sentiment influenced by U.S. fiscal risks and the Fed’s adjusted tone.

Pressure from Powell’s Remarks

During the ECB Forum in Sintra, Powell emphasized a “patient approach” toward potential rate cuts. While he did not commit to a move in July, he indicated decisions will rely on incoming economic data, specifically focusing on Thursday’s nonfarm payrolls and other relevant signals.

“We await clearer signs that inflation is sustainably decreasing,” Powell stated.

The labor market’s strength shown in the JOLTS report provided minor short-term support for the dollar.

Trump’s Major Spending Bill in the Spotlight

The signing of President Donald Trump’s tax-and-spending megabill, passed by the Senate, could add 3.3 trillion dollars to national debt over the ensuing decade. Market participants worry this fiscal move may worsen Treasury supply and diminish confidence in the dollar.

“This expenditure increase signifies an issuance escalation, along with government spending beyond its means,” stated Rodrigo Catril, strategist at NAB.

Investors await the House vote for final approval before Trump’s self-imposed July 4 signing deadline.

Stay Updated on USD Trends and Triggers

To navigate currency volatility and anticipate rate expectations, investors should use:

Economics Calendar API to track vital data releases such as nonfarm payrolls, inflation reports, and rate discussions affecting dollar stability.

Concluding Thoughts

The U.S. dollar remains in a fragile state due to a dovish Fed, expanding debt, and rising political uncertainty. With the nonfarm payrolls report approaching and scrutiny on Trump’s fiscal strategies, volatility is expected to persist through July.