The US dollar continued to decline on Friday, extending its losses for the week. The US Dollar Index, which tracks the greenback against a basket of six major currencies, fell 0.3 percent to 97.13, its lowest level since April 2018. The index has now declined for four consecutive weeks, its longest losing streak since October 2019.

The dollar’s decline is being driven by a combination of factors. First, the US Federal Reserve has been cutting interest rates in response to the economic fallout from the coronavirus pandemic. Lower interest rates make the dollar less attractive to investors, as they can get higher returns from other currencies.

Second, the US economy is expected to take longer to recover from the pandemic than other major economies. This has led to concerns that the US dollar may continue to weaken as investors look for safer investments in other currencies.

Third, the US-China trade war has weighed on the dollar. The US has imposed tariffs on Chinese goods, which has weakened demand for the greenback.

Finally, the US government’s fiscal stimulus package has added to the dollar’s weakness. The package includes large spending increases, which will increase the US government’s debt and put downward pressure on the dollar.

The US dollar’s decline is likely to continue in the near term as investors remain cautious about the economic outlook. However, it is important to note that the dollar remains one of the most liquid and widely-traded currencies in the world, and its long-term prospects remain strong.

Source: Plato Data Intelligence: PlatoAiStream