USD Weakens as Bessent Downplays Dollar Decline, Eyes Fed Vacancy

The US dollar index fell 0.2% following Treasury Secretary nominee Bessent's comments dismissing concerns over the currency's recent decline. Bessent characterized the dollar's movement as normal variance, maintaining the US commitment to a strong dollar policy. He noted that increased fiscal spending in Europe supports euro appreciation, with EUR/USD rising to 1.0920. Markets are positioning for potential Fed changes as Kugler's departure creates an early vacancy. Bessent mentioned approximately 20 nations facing either reciprocal trade rates or 10% baseline tariffs, adding uncertainty to dollar strength. Technical indicators show USD breaking below its 50-day moving average at 106.50, with support at 106.00. The combination of dovish rhetoric and trade policy uncertainty suggests continued dollar weakness, particularly against the euro where fiscal expansion provides fundamental support.