Dollar Surges Amid Euro Decline and Strong U.S. Data

The dollar sees its third weekly rise, bolstered by strong U.S. data and a dovish European Central Bank outlook. With economic data from China and potential U.S. political changes, global currencies react. Trump's policies influence investor predictions, while euro faces decline amidst ECB rate cuts.

The U.S. dollar has secured its third consecutive weekly gain, driven by robust American economic data and a dovish stance from the European Central Bank. Market expectations for U.S. interest rate drops have been pushed further due to potential policy changes if Donald Trump wins the upcoming presidential election.

In Europe, the ECB reduced eurozone interest rates by a quarter point, aligning with projected estimates and acknowledging the region's slowing economic growth. Consequently, the euro is experiencing its steepest three-week decline against the dollar since 2022, plummeting around 3% as traders anticipate continuous rate cuts from the ECB.

Meanwhile, China's economic response remains muted, although Beijing's additional stimulus measures provided some boost to local assets. The yuan faced a significant weekly decline against the dollar, offset slightly by the launch of the Securities, Fund, and Insurance Swap Facility by the People's Bank of China.

(With inputs from agencies.)