Dollar Plummets as Distrust in US Policy Grows

The US dollar's decline against major currencies has continued, driven by easing geopolitical tensions and the return of the 'sell America' trade. This trend is expected to persist as distrust in US policy grows following recent coordinated currency intervention.

An insider report suggests that Donald Trump is regularly consulting with Kevin Warsh, which could indicate that the new Fed chair will be influenced by White House policies, further weakening the dollar.

However, a potential deal between Oman and Iran to reopen the Strait of Hormuz without charging fees could lead to increased oil supply, lower prices, and reduced inflation risks. This might prompt the Fed to maintain loose monetary policy, allowing other currencies to strengthen against the dollar.

The Japanese yen's fate remains uncertain, with different forecasts predicting its future performance. Bank of America predicts a decline in USD/JPY to 149 by year-end, while CBA foresees a rally to 165 by Q2 2027.