Dollar index, Lowest level since February 2022…97.48 recorded

The value of the US Dollar has shown a recent sharp decline, with the Dollar Index (DXY) falling to its lowest level since February 2022. According to MarketWatch on the 26th (local time), the DXY recorded 97.48, marking its lowest point in 3 years and 4 months.

The Dollar Index is an indicator that represents the relative value of the US Dollar compared to the currencies of six major countries such as the Euro, Yen, and Pound. This decline is interpreted as a result of a combination of the Federal Reserve (Fed) signaling interest rate cuts, the spread of global risk asset preference sentiment, and the easing of geopolitical tensions.

Recently, Jerome Powell, the Chair, mentioned that "the base interest rate has reached its peak and there is ample room for cuts," and as Fed officials have successively suggested the possibility of shifting to an accommodative monetary policy, the Dollar's weakening trend is accelerating.

The market views whether interest rate cuts will occur at the upcoming July Federal Open Market Committee (FOMC) meeting and the repercussions of that as a critical watershed for the Dollar's flow.