US Dollar Weakens Amid Fed Dovishness, Global Data Focus

The U.S. dollar has been under pressure amid easing geopolitical tensions following a ceasefire deal between Israel and Iran, combined with dovish signals from Federal Reserve officials. Market participants are cautious, awaiting key U.S. economic data such as Q1 GDP revisions, durable goods orders, and employment figures that could influence future Fed policy, especially with some Fed members advocating for a more dovish stance and President Trump reportedly considering an early Fed chair appointment. The dollar index (DXY) has pulled back to multi-year lows, while major currencies like the euro and British pound have reached new highs against the dollar. The Canadian dollar initially gained from higher oil prices but weakened due to disappointing inflation data and fading war-related premiums. Meanwhile, investors are hedging currency exposure more actively, reflecting uncertainty about the dollar's direction amid mixed economic signals and continued tariff concerns. European equities have seen some momentum loss recently, but currency gains continue to provide a tailwind for investors holding unhedged European stocks.