US dollar slides toward steepest weekly drop in seven months on policy uncertainty

The US dollar index is on track for its steepest weekly decline in seven months, exceeding a 1% loss, driven by volatile US-Europe relations and increasing policy uncertainty. Analysts attribute this slide to President Donald Trump's recent reversal of tariff threats against European nations, which has undermined confidence in the durability of US trade strategy. This downward trend extends a difficult period for the dollar, which saw its worst annual performance in eight years in 2025. Further pressure comes from expectations of two interest rate cuts by the Federal Reserve in 2026, contrasting with Fed projections, which narrows yield differentials that previously supported the currency. Historical models suggest the dollar could weaken by as much as an additional 8% in 2026 if current trends continue.

(Source：Crypto Briefing)