🪙 1. Current Position of the USD
• The USD has experienced its worst Q1 in 2025 since 1973, decreasing by about 10% against a basket of major currencies, significantly impacted by concerns over tariffs and rising budget deficits.
• Although many experts (Deutsche Bank, Morgan Stanley, BofA, JPMorgan, Goldman…) lean towards a continued weakening trend for the USD, they also warn of a sudden recovery possibility if U.S. economic data unexpectedly improves.
📉 2. Influencing Factors
a) Fed Policy & Interest Rates
JPMorgan predicts the Fed will continue to lower interest rates in the second half of 2025, typically creating conditions for a weaker USD.
b) Geopolitical Risks and Tariffs
Decisions to extend or increase tariffs (which expire on 9/7/2025) may continue to cause volatility, adding pressure on the USD.
c) U.S. Economic Strength
Although the U.S. economy is still stronger than many countries, the OECD forecasts GDP growth will slow, and inflation remains high (~4%), leaving little room for the Fed to continue raising interest rates.
📊 3. Technical Analysis – DXY Index
• According to Justin Bennett (Analyst at DailyPriceAction), the DXY is testing the lows around 97.00–97.70; if it breaks below, it could open up a stronger downtrend, but if it rebounds, the USD may form a technical bottom.
🎯 5. Conclusion
• The medium-term trend for a weak USD remains quite strong, but the risk of a sudden recovery cannot be overlooked.
• If you are a short-term trader, you may choose to adopt a short-selling strategy when the DXY breaks below 97. It is important to manage risk carefully.
• For long-term traders or position traders, it is best to closely monitor Fed interest rates, U.S. economic data (NFP, CPI), and tariff policies — entering positions when the trend is clearly identified.