The U.S. Dollar Index (DXY) has been in a sharp downtrend, recently hitting its lowest level since March 2022 and posting its worst first-half performance since the 1970s, with a year-to-date decline exceeding 10%.

This weakness is driven by growing expectations of Federal Reserve rate cuts, political pressure on Fed Chair Powell, and investor concerns over U.S. fiscal stability and potential stagflation. Technical indicators confirm a strong bearish trend, with the DXY trading below all major moving averages and potential support near 98 USD. Market sentiment remains cautious, and any changes in Fed policy or political developments could significantly impact the index’s direction.