US Dollar Index Nears 98.00 as Yields, Risk Appetite Shift.
The US Dollar Index (DXY) extends its decline, approaching the 98.00 level amid improved risk appetite and declining US Treasury yields
The US Dollar continued its decline during Monday’s European session, extending Friday’s reversal. A moderate risk-on sentiment, combined with lower US Treasury yields and a lack of major economic data, weighed on the greenback.
In Europe, the Euro edged higher after an ECB survey on business financing showed optimism among firms despite growing concerns over potential US tariffs. This added further downside pressure on the USD.
Earlier, the Japanese Yen firmed after Japan’s elections left Prime Minister Ishiba in power, averting the opposition’s aggressive tax-cut proposals. Although the ruling coalition narrowly lost its upper house majority, Ishiba pledged to focus on trade negotiations with the US.
Despite a mild recovery in sentiment, market caution persists ahead of the August 1 tariff deadline. Over the weekend, President Trump intensified trade tensions by proposing 15%–20% blanket tariffs on EU goods. In response, the EU is reportedly considering raising its 10% tariffs on US products—even if a deal is reached.
