The U.S. dollar struggles as the DXY index fell 0.4% in the final session of the week, with a total decline of 1.4%. This downturn is primarily linked to January's disappointing retail sales, which dropped 0.9%, exacerbated by adverse weather and specific regional events. Consequently, there is a growing expectation for rate cuts in 2025, and futures markets reflecting lower return expectations have pushed U.S. Treasury yields down. Trade tensions further complicate the dollar's outlook, particularly amidst new tariff discussions initiated by President Trump.
The DXY index dropped 0.4% at week’s end, marking a 1.4% decline for the week, as weak retail sales data and rising trade tensions weigh on the dollar.
The disappointing drop in January retail sales by 0.9%, far worse than the projected decline, points to a significant contraction in consumer demand.
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