Created
: 2025.06.12
- English
- English
- What's Myforex
- Share
- Use tools
- Get information
- What's New
- Help center
- About us
- Customer support
- Terms and policies
-
-
PortfolioShare your portfolio and performance in real time -
Events & contestsEvents and contests held by retail brokers around the world
-
-
Real-time spread comparisonCompare spreads of major retail brokers in real time -
Volatility analysisVisualize volatility as a measure of daily market activity -
Swap point comparisonCompare buy and sell swap values for each broker by symbol -
Market rates & chartsCheck prices for all instruments offered by each broker -
IndicatorsProviding in-house developed indicators for MT4/MT5 -
Trading calculatorsCalculation tools for each broker to help you trade
-
-
World FX newsLatest news on forex and cryptocurrencies from around the world -
Broker informationTrading information of retail brokers worldwide -
MetaTrader4/5 user guideUser guide collection for the latest MetaTrader4/5 -
Economic calendarRelease calendar for indicators from official sources of major economies
US Dollar Index (DXY) dives to fresh three-year lows below 98.00
World FX news
Breaking news
US Dollar Index (DXY) dives to fresh three-year lows below 98.00
2025.06.12 20:35
2025.06.12 20:35
Risk aversion and hopes of Fed cuts are punishing the USD.
Markets are growing sceptical about Trump's ability to cut significant trade deals.
Recent Fed-ECB divergence is putting additional pressure on the US Dollar.
,
A mix of scepticism about US trade deals and hopes of further interest rate cuts by the Federal Reserve, following softer-than-expected consumer prices in May, has triggered a sharp US Dollar sell-off, sending the Dollar Index to fresh multi-year lows.
The USD Index (DXY), which measures the value of the US Dollar against the world's most traded currencies, is testing levels right below 98.00 for the first time since April 2022, after having depreciated about 1.30% so far today.
Tariffs and Fed cut hopes are hurting the USD
Investors' scepticism about the durability of a modest US-China trade deal, and Trump's threats to implement unilateral tariffs on most trading partners from June 9, have undermined investors' confidence in the US negotiators' ability to reach significant deals. The risk-averse market is hammering the US Dollar against safe-haven currencies like the JPY and the CHF.
Apart from that, the USD is also plummeting against the Euro. The soft US inflation figures released on Wednesday have heightened expectations that the Fed will cut rates by 25 basis points in September.
This contrasts with the recently adopted hawkish stance of the European Central Bank and highlights a monetary divergence that has boosted the EUR/USD to fresh multi-year highs near 1.1600.
ECB President, Christine Lagarde, suggested after last week's meeting that the bank might be close to the end of the easing cycle in a message that has been repeated by a number of European policymakers this week. In the absence of relevant Eurozone releases, these comments are providing significant support to the Euro.
Central banks FAQs
Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%.
A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing.
A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called 'doves'. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called 'hawks' and will not rest until inflation is at or just below 2%.
Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.
Last updated
: 2025.06.12
Related articles
RBA's Hauser: Enormous amount of uncertainty in global economy
9 minutes agoUSD/CAD trades with mild gains above 1.3650 as Trump vows 50% tariff on copper
45 minutes agoGBP/USD coils as investors await tariff clarity again
48 minutes agoEUR/USD holds ground as EU spared from tariffs, Trump urges Fed cuts and delays deadline
2025.07.09 06:52RBNZ expected to keep interest rate on hold after six consecutive cuts
2025.07.09 06:15Canadian Dollar corkscrews as market sentiment roils on fresh tariff threats
2025.07.09 04:50
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
Was this article helpful?
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Thank you for your feedback.
Thank you for your feedback.
Most viewed
RBA's Hauser: Enormous amount of uncertainty in global economy
Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser said early Wednesday that there is an enormous amount of uncertainty in the global economy.
New
2025.07.09 08:53USD/CAD trades with mild gains above 1.3650 as Trump vows 50% tariff on copper
The USD/CAD pair trades with mild gains near 1.3665 during the early Asian session on Wednesday. The Canadian Dollar (CAD) softens against the Greenback after US President Donald Trump reignited concerns following tariffs on Japan and South Korea.
New
2025.07.09 08:16GBP/USD coils as investors await tariff clarity again
GBP/USD churned the charts near 1.3600 as the market grapples with inconsistent policy messaging on President Donald Trump's whipsaw tariff policies.
New
2025.07.09 08:14EUR/USD holds ground as EU spared from tariffs, Trump urges Fed cuts and delays deadline
EUR/USD registers minimal gains during the North American session as the US dollar erases some of its earlier gains, following US President Donald Trump's demand that the Federal Reserve cut interest rates, as he delays the July 9 deadline towards August 1.
New
2025.07.09 06:52RBNZ expected to keep interest rate on hold after six consecutive cuts
The Reserve Bank of New Zealand (RBNZ) is expected to keep the Official Cash Rate (OCR) steady at 3.25% following the conclusion of its July monetary policy meeting on Wednesday.
New
2025.07.09 06:15Canadian Dollar corkscrews as market sentiment roils on fresh tariff threats
The Canadian Dollar (CAD) struggled on Tuesday, briefly gaining ground against the US Dollar (USD). Risk-off flows returned to the forefront and kicked the Loonie back into the day's opening bids just below 1.3700.
New
2025.07.09 04:50AUD/USD rises after RBA holds rates, attention shifts to FOMC Minutes
The Australian Dollar (AUD) is strengthening against the US Dollar (USD) on Tuesday, following the Reserve Bank of Australia's (RBA) decision to hold the cash rate steady at 3.85%.
New
2025.07.09 04:44US Commerce Secretary Lutnick: 15-20 letters expected, copper tariffs by August
US Commerce Secretary Howard Lutnick revealed that another 15 to 20 letters are expected to be announced in the next two days, he said in a CNBC interview.
New
2025.07.09 04:11Forex Today: Focus shifts to the FOMC Minutes
The Greenback could not maintain its initial strong momentum, finishing the day with only a slight change from Monday's closing levels. Meanwhile, investors remained watchful of events on the trade front after President Trump reignited concerns following tariffs on Japan and south Korea.
New
2025.07.09 04:06NZD/USD flattens as risk sentiment sours ahead of RBNZ rate decision
The New Zealand Dollar (NZD) halts its gains against the US Dollar (USD) on Tuesday, as the Greenback strengthens following renewed tariff threats and an extension of the deadline for reciprocal tariffs.
New
2025.07.09 03:44Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy
