The dollar index (Dxy), a measure of the force of the US dollar compared to a basket of large global currencies, fell below 98 for the first time since the beginning of 2022.
This decision indicates a notable change in the global money markets and could create a favorable environment for risk assets, especially cryptocurrencies, such as bitcoin
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In recent years, a reading of 100 has generally reflected the domination of the dollar and a feeling of risk, often weighing on digital actions and assets. Conversely, a weakening of the dollar facilitates financial conditions, stimulates global liquidity and tends to benefit from speculative assets.
Several factors contribute to the current decline. The inflation of the United States reached 2.4% in annual sliding, slightly below the consensus estimate of 2.5%, strengthening market expectations for a change in dominant monetary policy.
According to the CME Fedwatch tool, the markets are now prices in a probability of 99.8% of a rate drop at the June meeting in the federal reserve, the target beach should drop from 4.25 to 4.50%.
The growing stories around de-political, combined with the political uncertainty of trade policies and tariffs of the Trump administration, have eroded confidence in the dollar, accelerating its decline.
Read more: US Dollar to slide further this summer, warns Bank of America
