Dollar Index (DXY), a target of the US dollar strength against a basket of larger global currencies fell under 98 for the first time since the beginning of 2022.

This feature signalizes a remarkable shift in global currency markets and could create a favorable environment for risk assets, especially cryptocurrencies, such as Bitcoin

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In recent years, a DXY reading over 100 has typically reflected dollar dominance and a risk-off mood that often weighs on stocks and digital assets. Conversely, a debilitating dollar is facilitated, increasing global liquidity and tends to benefit speculative assets.

Several factors contribute to the current decline. The US headline inflation came in at 2.4 percent years over years, slightly below the consensus estimate of 2.5 percent, strengthening the market’s expectations of a Dovish monetary policy shift.

According to the CME FedWatch tool, the markets are now pricing in a probability of 99.8 percent of a rate cut at the Federal Reserve meeting, with the target area expected to fall to 4.25 to 4.50 percent.

Growing tales of de-dollarization combined with political uncertainty from Trump administration’s trade and customs policies have eroded confidence in the dollar and accelerate its decline.

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