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Dollar Falls 0.48% Amid US and Global Economic Uncertainty

Published

2 weeks ago

26/06/2025

Dollar Falls 0.48% Amid US and Global Economic Uncertainty

The US dollar weakened again on Wednesday 25th June, pressured by ongoing economic uncertainties and a pause in tensions between Iran and Israel.Shaun Osborne from Scotiabank told AFP, “The dollar remains weak.” By 7 p.m. GMT, the dollar had fallen 0.48% against the euro, trading at $1.1664 per euro, and declined 0.38% against the British pound, at $1.3668.

Analysts had expected little change after Federal Reserve Chair Jerome Powell’s testimony before the Senate Banking Committee.

Powell stated he does not foresee the U.S. moving toward a scenario of slow growth combined with high inflation, though he noted the Fed is watching the risks closely.

Osborne explained, “Powell stuck to his position that the Fed can’t cut interest rates right now,” despite frustrations from former President Donald Trump.

Powell also highlighted the difficulty in predicting how new tariffs imposed by Trump might impact prices, saying, “There’s no real modern precedent for this.”

Investors are now awaiting the release of the Personal Consumption Expenditures (PCE) inflation index on Friday 27th June, a key measure used by the Federal Reserve to gauge inflation.

Osborne added, “Recently, U.S. economic data has repeatedly disappointed markets.” In contrast, European data has consistently outperformed market expectations, supporting the euro and weakening the dollar.

Additionally, with concerns over oil supplies easing and a ceasefire between Iran and Israel announced by Trump on Tuesday 24th June, the geopolitical risk premium on the dollar has decreased.

Stephen Innes of SPI Asset Management noted that the dollar, often seen as a safe haven, has benefited less from these tensions.

During a NATO summit in The Hague on Wednesday, U.S. President Donald Trump said the ceasefire is “going very well.”

Wednesday 25th June vs. Tuesday 23rd June exchange rates at 7 p.m. GMT: