The dollar index (DXY), a measure of the fortress of the US dollar against an important world coins basket, fell below 98 for the first time since the beginning of 2022.
This movement indicates a notable change in global currency markets and could create a favorable environment for risk assets, especially cryptocurrencies, such as Bitcoin
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In recent years, a DXY reading over 100 has reflected the domain in dollars and a feeling of risk, often weighing the digital shares and assets. On the contrary, a weakening of the dollar relieves financial conditions, increases global liquidity and tends to benefit speculative assets.
Several factors are contributing to the current decrease. The inflation of the United States holders reached 2.4 percent year after year, slightly below the 2.5 percent consensus estimate, which strengthened market expectations for a deceptive monetary policy change.
According to the CME Fedwatch tool, markets now have a price at a probability of 99.8 percent of a rate reduction at the June Federal Reserve meeting, and the target range is expected to fall to 4.25 to 4.50 percent.
The growing narratives around dollarization, combined with the political uncertainty of the commercial policies and tariffs of the Trump administration, have eroded confidence in the dollar, accelerating their decline.
Read more: American dollar to slide more this summer, Bank of America warns
