The dollar index (DXY00) today is down by -0.62% at a 3-week low. The dollar tumbled today after President Trump threatened a 50% tariff on goods from the European Union on June 1, saying "Our discussions with them on trade are going nowhere." The dollar was also pressured by comments from Chicago Fed President Goolsbee, who said Fed rate cuts are still possible over a 10-month to 16-month time horizon. The dollar rose from its worst level today after US Apr new home sales unexpectedly rose to a 3-year high.
The dollar still has some negative carryover from Thursday when the House passed President Trump's tax and spending plan, which would add to the burgeoning US budget deficit. Also, pressure remains from last Friday when Moody's Ratings downgraded the US government's credit rating from Aaa to Aa1, citing a ballooning budget deficit and fiscal concerns. The downgrade put the dollar's status as a global reserve currency into question and may prompt some investors to lighten up on their dollar assets.
