The US Dollar Index (DXY) came under pressure on Thursday as investors weighed economic data and monitored negotiations between the United States and Russia.
The index, a measure of the greenback against a weighted basket of currencies, rose 0.1% to almost 97.00. Despite the late-week uptick, the DXY is on track for a weekly loss of about 0.6%, adding to its year-to-date drop of nearly 1.5%.
Over the last 14 months, the buck has come under pressure amid a plethora of headwinds, from tariff policy to Federal Reserve policy expectations.
After President Donald Trump nominated Kevin Warsh as the new head of the Federal Reserve, the greenback rebounded, rallying more than 1%. It has since erased its gains and is struggling to generate momentum.
In recent trading sessions, the dollar has struggled against its major currency peers, particularly the Japanese yen.
The USD/JPY currency pair declined 0.31% to 152.79, from an opening of 153.27. The pair has tumbled more than 2% year-to-date.
Japan recently held elections that gave Prime Minister Sanae Takaichi and her Liberal Democrats a majority in Tokyo, triggering a rally in the Nikkei.
Because of the yen’s rally, there has been growing expectation that authorities will intervene to prevent further appreciation.
Stateside, traders have been digesting a plethora of economic data, including the January jobs report, which came in better than expected. The blockbuster jobs report is also anticipated to buy the Federal Reserve enough time to delay any potential interest rate cuts.
According to the CME FedWatch Tool, the futures market has penciled in a June quarter-point rate cut, something that further weighed on the greenback.
The next major economic report will be the January Consumer Price Index (CPI). Early estimates suggest the annual inflation rate will slow to 2.6%, even as new data indicate that the US importers are absorbing 86% of the tariff costs.
Meanwhile, there are reports surfacing that Russia is considering an end to its de-dollarization campaign, a years-long approach to diversify away from the greenback.
Instead, Washington and Moscow could be striking up an agreement to bolster natural gas production and engage in other energy arrangements.
Yields on US Treasury securities were red across the board, with the benchmark ten-year falling more than eight basis points to below 4.1%. The 30-year also fell eight basis points to below 4.74%.
The USD/CAD currency pair rose 0.26% to 1.3613, from an opening of 1.3578. The EUR/USD slid 0.02% to 1.1872, from an opening of 1.1874.