The start of a new week of forex trading brings to a halt the bullish upward wave that has propelled the US dollar over the past 2 months. Trading on the Dollar Index (USDIDX) and individual USD-linked currency pairs opened from a bearish gap down, triggered by the news reported over the weekend that Donald Trump had chosen Scott Bessent to head the US Treasury Department.
In his first interview after his election, Bessent said that his priority would be to implement Trump's various promises on tax cuts, the introduction of tariffs and spending cuts would also be a focus, as would maintaining the dollar's status as the world's reserve currency.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appThe market is focusing its attention today primarily on tax cuts. Bessent, who is seen as knowledgeable about the markets in that he himself is a fund manager at Key Square Group, is expected to advocate less spending and more gradual tariffs, according to political commentators, theoretically easing earlier concerns that exacerbate inflationary pressures. Lower pressure means lower forecasts for slow interest rate cuts, triggering declines in the world's reserve currency today.
The U.S. dollar against a basket of other currencies has broken above the upper end of the trading range seen since 2022, and despite today's near 0.5% decline, remains at its highest levels since October 2023. Source: xStation
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
