U.S. Dollar Slides Amid Economic Uncertainty, Fed Rate Cut Speculation

(RTTNews) - The U.S. dollar weakened against other major currencies in the European session on Friday amid ongoing worries about the U.S. and worldwide economies.

The trader's sentiment also fell due to the ongoing concerns about rising global trade tensions, particularly between the U.S. and China. Traders also look to cash on the steep spike on Thursday after President Donald Trump announced a 90-day pause on new "reciprocal tariffs."

The uncertainty about what will happen between now and the end of the 90-day pause is also weighing on the markets.

Trump paused most of his sweeping reciprocal tariffs for 90 days to allow more time for negotiations but raised the levies on China to 125 percent, further escalating a high-stakes confrontation between the world's two largest economies.

The USD also fell, as weakening confidence in the U.S. economy caused investors to leave U.S. assets to the benefit of safe havens such as the Swiss franc, yen and euro, as well as gold.

In June, traders expect the U.S. Federal Reserve (Fed) to start lowering interest rates again, and by the end of the year, it is likely to lower its policy rate by a full percentage point.

In the Asian trading today, the U.S. dollar fell to more than a 10-year low of 0.8113 against the Swiss franc and more than a 3-year low of 1.1442 against the euro, from early highs of 0.8258 and 1.1247, respectively. On the downside, 0.79 against the franc and 1.15 against the euro are seen as the next support levels for the greenback.

Against the pound and the yen, the greenback dropped to a 1-week low of 1.3112 and nearly a 6-month low of 142.26 from early highs of 1.2985 and 144.15, respectively. The greenback may test support near 1.32 against the pound and 141.00 against the yen.

Against Australia, the New Zealand and the Canadian dollars, the greenback slipped to a 1-week low of 0.6259, an 8-day low of 0.5812 and more than a 5-month low of 1.3882 from early highs of 0.6181, 0.5744 and 1.3958, respectively. If the greenback extends its downtrend, it is likely to find support around 0.64 against the aussie, 0.59 against the kiwi and 1.37 against the loonie.

Looking ahead, U.S. PPI for March, U.S. University of Michigan's consumer sentiment for April and U.S. Baker Hughes oil rig count data are slated for release in the New York session.