Author：Currency Explorer

According to FXEM analyst Abdelaziz Albogdady, while the US dollar has stabilized after falling to multi-year lows, it still faces continued downside risks. The dollar's weakness is mainly due to Trump's comments signaling a tolerance for currency depreciation. Markets are also increasingly concerned that Trump may nominate a more dovish Federal Reserve chair, potentially leading to looser monetary policy and reduced institutional independence. Coupled with widespread unease about domestic political risks in the US (especially the rising possibility of a government shutdown), the dollar continues to be under pressure.With the market largely priced in the expectation that the Federal Reserve will hold rates steady, the focus has shifted entirely to forward guidance. Any dovish leanings could exacerbate downward pressure on the dollar and Treasury yields.