Dollar struggles to recover as Market shifts focus from Inflation to Growth risks

Dollar struggles to recover as Market shifts focus from Inflation to Growth risks

The dollar index is trading flat at the start of the European session, struggling to recover the losses from the previous session. The greenback is now almost 2% below the year's peak in mid-January. The so-called "Trump trade," which has dominated market sentiment since the November presidential election, appears to have lost momentum—at least for now. Traders are no longer focused on the potential impact of tariffs on consumer prices, which could drive inflation higher and prompt a more hawkish stance from the Federal Reserve—a scenario that typically supports dollar strength. Instead, concerns over the impact of protectionism on economic growth have gained traction, pointing to the possibility of slower growth and a more dovish Fed, which in turn weighs on the dollar.

Ricardo Evangelista – Senior Analyst, ActivTrades

Source: ActivTrader

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