JFD Market Commentary: USD Remains Under Pressure – Slowing Growth and Global Policy Divergence Weigh

JFD Market Commentary: USD Remains Under Pressure – Slowing Growth and Global Policy Divergence Weigh

The JFD analyst team maintains a cautiously bearish outlook on the U.S. dollar. In our view, a combination of slowing economic momentum in the U.S., continued fiscal and monetary support across other economies, and declining global investor appetite for U.S. assets all point toward further structural weakness in the dollar.

Key Drivers:

U.S. Growth Is Losing Steam: Leading indicators — including rising jobless claims, weakening services PMIs, and softening construction and auto sales data — reflect growing cracks in the U.S. growth picture.
Global Policy Support Elsewhere: In contrast, many economies, particularly across Europe, Asia, and the Pacific region, remain broadly accommodative in both fiscal and monetary terms.
Fading USD Appeal: The market is now pricing a lower terminal rate for the Fed, even as term premiums on U.S. Treasuries have risen. This combination, in our view, forms a clearly USD-negative setup.

Strategic Outlook for Traders:

While short-term technical bounces in the USD may occur — especially if the Fed communicates a hawkish stance — we believe these moves are likely to be short-lived. The broader trend, both from a macro and flow perspective, continues to point lower.

We currently see selective opportunities in:

EUR/USD: Bullish potential if the pair holds above the 1.0900 resistance zone
AUD/USD and NZD/USD: Stabilizing, with medium-term upside potential
Emerging Markets: EMEA currencies (e.g., ZAR, HUF) benefiting from carry flows and improving macro resilience

Conclusion:

From a fundamental standpoint, the U.S. dollar remains vulnerable. Global capital allocation is shifting, and Fed policy is increasingly being perceived as restrictive rather than supportive — reinforcing the risk of further dollar weakness. Our bias remains cautious in the short term and clearly bearish over the medium term.

Disclaimer:

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