US Dollar Weakens Amid Tariff Risks, Fed Rate Cut Expectations

The U.S. dollar is expected to remain weak in the coming months due to concerns over mounting national debt from President Donald Trump's $3.3 trillion tax-cut and spending bill, erratic tariff policies, and growing expectations of Federal Reserve interest rate cuts. Fed Chair Jerome Powell has maintained a cautious, data-dependent stance on rate cuts, neither ruling out a July reduction nor committing to it, which has fueled market speculation and a sliding dollar. Recent positive U.S. economic data such as job openings and manufacturing indexes have provided limited support to the dollar, but uncertainties over tariffs and rising inflation risks continue to weigh heavily. The Senate has narrowly passed Trump's spending bill, intensifying deficit concerns and further pressuring the dollar, while key upcoming payroll and inflation data will be closely watched for signals on Fed policy. Meanwhile, the Euro has strengthened significantly against the dollar, prompting concerns among European Central Bank officials about inflation and export competitiveness. Overall, the dollar's decline is the worst in decades, driven by dovish Fed outlooks, economic uncertainties, and political factors tied to Trump's policies.