The US dollar experienced a decline today, nearing its lowest point in 11 weeks against major currencies during early trading. This downturn is largely attributed to falling yields on short-term US Treasury bonds, following a series of disappointing economic reports.
In contrast, the Japanese yen, a traditional safe-haven currency, surged to its highest level since October, reflecting reduced investor confidence amid potential new tariffs threatened by the administration of President Donald Trump.
The Canadian dollar remains close to its lowest level in two weeks, with further volatility expected next week due to additional charges.
“The flow of American data is now disappointing, raising questions about the narrative of the exceptional status of the US economy that has supported the dollar,” noted Tabas Strickland, head of the market economy department at the National Bank of Australia. He added, “Uncertainties surrounding trade policy are adversely impacting market sentiment, negatively influencing commodity-linked currencies while bolstering demand for safe havens.”
The US dollar index, which gauges the currency’s performance against six major counterparts, dipped by 0.1 percent to 106.17 during Asian trading, approaching Monday’s low of 106.13—the weakest level observed since December 10.
On the previous day, the American Convention Board announced a decline in the consumer confidence index, which fell by seven points to 98.3—the largest drop since August 2021. This figure significantly missed economists’ expectations, which had forecasted a reading of 102.5.
This disappointing result contributes to a broader trend of weak economic data, reinforcing forecasts that the Federal Reserve may opt to reduce interest rates by 25 basis points twice this year, with a possible cut anticipated as early as July, according to market insights.
The yield on two-year US Treasury bonds dropped to 4.086 percent on Wednesday, approaching its recent low of 4.074 percent recorded the day before—a level not seen since early November.
US Treasury Secretary Scott Bessent remarked on Tuesday that the economy is exhibiting greater fragility than indicated by traditional economic indicators. He attributed this vulnerability to interest rate volatility, persistent inflation, and job growth concentrated in the government sector. He also highlighted tariffs as a crucial source of revenue.
