USD weakens across majors as Trump's Fed picks signal dovish shift
The US dollar has broadly retreated against major currencies as markets digest President Trump's Federal Reserve appointments, interpreted as distinctly dovish. EUR/USD climbed 0.5% to 1.0835, while GBP/USD advanced 0.4% to 1.2680, as traders price in a more accommodative monetary policy stance. The dollar index fell 0.3% to 103.85, erasing earlier gains from geopolitical tensions. Trump's nominees are known advocates for lower interest rates and aggressive monetary stimulus, contrasting with the Fed's recent hawkish rhetoric. USD/JPY dropped 0.6% to 153.50 as the policy divergence narrows between the Fed and Bank of Japan. Market pricing now shows increased probability of Fed rate cuts in Q3 2025, earlier than previously expected. Technical indicators suggest further dollar weakness if the DXY breaks below 103.50 support, potentially accelerating the move toward 103.00.
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