The current development of the US dollar is interpreted by market experts like Rania Gule, senior market analyst at XS.com / MENA, as a possible turning point or even as the beginning of a longer-term weakness phase. According to her analyses, a fundamental trend reversal is already underway, which is clearly reflected in the recent price movements.
Current Situation and Historical Context
According to the Dollar Index (DXY), the US dollar is currently experiencing one of its weakest phases in decades. Since the beginning of the year, the index has lost almost 9% of its value – a historical decline. While the greenback has managed to temporarily halt its downward trend and stabilize, its recovery compared to other markets, such as the stock markets, remains weak. The euro-dollar exchange rate is currently around 1.13, reflecting the relative weakness of the dollar.
Causes of Weakness
The causes of the dollar’s weakness include economic uncertainties, such as the slight shrinkage of the US economy in the first quarter of 2025 (-0.3% annualized). Political factors like credit rating downgrades and trade conflicts are also burdensome. Moreover, other currencies like the British pound or the Japanese yen are showing signs of appreciation.
Assessment: Turning Point or the Beginning of the End?
Rania Gule sees signs of a fundamental trend reversal for the US dollar in these developments and emphasizes structural changes: “A fundamental trend reversal for the US dollar is already underway,” she explains.
Outlook
The further course significantly depends on how robustly the US economy recovers, how the global interest rate environment develops, and what political decisions are made. As long as these questions remain unanswered, volatility is expected to remain high, and further depreciation phases could be possible.
Conclusion:
The US dollar is currently at a critical point: the recent weakness phase could mark both a turning point and the beginning of a longer-term depreciation trend. Experts like Rania Gule already see signs of a fundamental trend reversal in the foreign exchange market.