The American dollar stabilizes as ISM, Jolts overcomes expectations

The American dollar indicator moves on the ninth day in a row, reaching the lowest level since February 2022.
Greenback publishes the worst performance in the first half since 1973, which is over 10% in H1 2025.
Market attention is addressed to Powell’s speech, ISM Manufacturing PMI and data in the brief -term direction.

The American dollar (USD) is still in the face of sales pressure, and the American dollar index (DXY) will fall up to 96.38, its weakest level from February 2022, during early trade on Tuesday.

However, Greenback reflected during the American session, and DXY recently saw trade around 96.85, supported by better than expected US economic data. Stronger ISM PMI production And Jolts OpenDs. The report helped to relieve the bears of the shoots, although general sentiment remains cautious among constant fears of fiscal stability, uncertainty of tariffs and growing political pressure on the federal reserve (FED).

DXY has now finished the last six months in red, falling by more than 10% in the first half of 2025-his worst results in the first half from the time when the currencies began to flow in 1973, and the second quarter itself designated its highest quarterly from 4,2022. The American Dolnik weakened in relation to all main currencies G10, when investors sold from the lower part.

Many key factors caused a edged decline in the US dollar over the past quarter, but the weakness of Greenback is primarily due to the unpredictable commercial and economic policy of US President Donald Trump. His huge tax proposal and spoken, known as “One Big Beautiful Bill”, annoyed investors. The act, which covers constant tax reduction and deep renovation of expenses, fuels concerns regarding fiscal instability and may augment over $ 3.3 trillion to domestic debt.

By adding pressure, along with the upcoming date of July 9, Trump’s pressure on sweeping tariffs increases the uncertainty about global trade and economic policy. Having less than a week, only a preliminary agreement with Great Britain and de -escalation with China was reached, while talks with other key trading partners remain stuck. It seems that the US administration withdraws from the idea of ”90 trade agreements for 90 days”. Instead of securing comprehensive trade agreements, it seems that he is now focusing on momentary agreements, maintaining 10% of import tax, which ultimately falls on American consumers.

PMI ISM production increased to 49.0 in June from 48.5 in May, slightly above the expected 48.8. Although still below 50 signaling characters – data suggest a slower rate of decrease in production activity. Meanwhile, job offers in the US increased by 374,000 to 7.769 million in May, the highest level from November 2024 and much above a consensus in the amount of 7.3 million, which indicates the further strength of the labor market.
Political interference still burdens the American dollar when US President Donald Trump expanded his criticism outside the Fed Chairman Jerome Powell to the entire Federal Reserve Council. On Monday, Trump called for an aggressive reduction in the “1% or better” rate, enlivening the concerns about the independence of the central bank. Treasury Secretary Scott Bessent repeated sentiment, saying that the FED officials “seem a bit frozen behind the wheel” and suggesting that they hesitate in response to politics. He also lost the risk of inflation from the tariffs, adding: “We did not see inflation from tariffs”, which can signal pressure on further alleviating politics despite macro uncertainty.
According to the BHH Marketview report, 2-year tax yields in the US have fallen to the two-month lowest level of 3.71%, because the Fed Funds Fundus Futures goes to the price in a deeper alleviation of politics. Markets now expect the FED to reduce rates by 125 base points over the following year, which will reduce the range to 3.00-3.25%. However, most of the other main central banks are approaching the end of their soothing cycles. The report emphasizes that the narrowing of 2-year spreads from the G6 bond yield can be burdened with an American dollar.
Having less than a week, President Trump explained that he was not planning to extend the tariff detention outside July 9. In an interview with Fox News Channel’s Sunday morning FuturesTrump said that the letters would be sent to countries notifying them about fresh tariff rates if the offers are not achieved. “We’ll look at how the country treats us – whether they are good or not so good – some countries that we don’t care will just send a large number,” he said.
“One Big Beautiful Bill”, a broadly extensive tax package by President Donald Trump, is now in the critical session of “Voting-a-Ram” in the US Senate, when the Republicans sought to imposed on the deadline on July 4. The 940-page bill has cleaned the procedural obstacle over the weekend, but now it encounters many changes. Democrats press the removal of parts they disagree with, especially enormous medicaid cuts and food vouchers, as well as tax breaks, which mostly assist the prosperous. The high rate legislative battle increases fiscal uncertainty and weighs the sentiments of the American dollar.
Speaking on the ECB forum about central banking, Fed Chairman Jerome Powell confirmed the approach of “expectations and see” to politics, emphasizing the importance of incoming data. Powell admitted that inflation may augment in the summer, but emphasized the Fed’s readiness to remain patient. He also noticed that most FED officials still expect that there will probably be a proper reduction in rates this year. During the measured tone, the confirmation of mitigation of bias helped to strengthen the expectations of the reduction of the September rate, keeping the American dollar under pressure.

Technical analysis: Greenback will slip under the support of the wedge

. American dollar index (DXY) still trades under the indefinite pressure of the bear, recently it is approaching below the lower limit of the falling wedge pattern, which has been conducting a price campaign from mid -May. The indicator currently floats around 96.85 and will test the lower limit of the wedge after reflecting from the low middle level of 96.38, although it remains well below 21-day interpretation of the movable average (EMA), currently 98.20. This consistent rejection of EMA emphasizes the strength of the prevailing reservoir. The division of the wedge suggests possible acceleration under the pressure of bear, without immediate signs of reversal.

The shoot indicators additionally confirm negative perspectives. The relative force indicator (RSI) dropped to 27.59, entering the sold -out territory, which can signal potential brief -term reflection, although it can also reflect the intensity of current sales pressure. Meanwhile, the histogram of the movable medium convergence (MACD) remains on a negative territory, with the MacD line expanding below the signal line, strengthening the bear’s tendency. While DXY cannot recover and maintains above the zone 98.00–97.80, the slightest resistance path remains in the minus, with eyes at the next key support around the round level 96.00.

FAQ in American dollars

The American dollar (USD) is the official currency of the United States of America and the “de facto” currency of a significant number of other countries where it is in circulation with local notes. It is most often a commercial currency in the world, which is over 88% of all global currency turnover, i.e. an average of $ 6.6 trillion of transactions per day, according to the data from 2022. After the Second World War, USD took over from the British pound as the reserve currency of the world. For most of its history, the American dollar was supported by gold, up to the Bretton Woods agreement in 1971, when the golden standard disappeared.

The most significant single factor affecting the value of the American dollar is the monetary policy, which is shaped by the Federal Reserve (FED). The Fed has two seats: achieving price stability (control inflation) and supporting full employment. Its main tool to achieve these two goals is to adjust interest rates. When the prices rise too quickly and inflation is above 2% of the Fed target, the FED will augment the rates, which helps USD values. When inflation drops below 2% or the unemployment rate is too high, the Fed may reduce interest rates that are weighing in the green area.

In extreme situations, the Federal Reserve can also print more dollars and introduce quantitative alleviation (QE). QE is a process in which the Fed significantly increases the credit flow in the detained financial system. It is a non -standard policy measure used in the event of a loan arid, because the banks will not borrow (for fear of the contractor). This is the last last, when just lowering interest rates is unlikely to achieve the necessary result. The weapon of choosing the Fed was a FED weapon to combat the credit crisis, which took place during the great financial crisis in 2008. This includes FED printing more dollars and using them to buy US government bonds mainly from financial institutions. QE usually leads to a weaker American dollar.

Quantitative twist (QT) is the opposite process in which the federal reserve stops buying bonds from financial institutions and does not reinvest from the bonds that it has in fresh purchases. This is usually positive for the American dollar.