The US dollar started trading at the opening of this week with a gloomy result following last week's performance which saw the biggest weekly fall since November 2023.
The effect of its depreciation began at the beginning of the week when Donald Trump officially took office as the 47th President of the United States (US).
He, who was seen as a little 'soft' on tariffs against China compared to previous harsh threats, has had an impact on the fall of the US dollar.
Trump said his latest talks with Chinese President Xi Jinping went well and it is possible that a trade agreement can be reached between the two world's giant economies.
However, it is still too early to assess its impact on the market while analysts are still monitoring the development of the tariff issue.
In addition, investors will be more cautious for trading this last week of January with the main focus being on the results of the first FOMC meeting of 2025.
The majority of the market still maintains expectations for the interest rate to be maintained at 4.50% following the cautious tone conveyed at the meeting last December.
Also adding pressure to the US dollar is Trump's renewed call for US interest rates to be lowered.
In addition to the Federal Reserve (Fed), several other policy meeting results will also be watched, including the Bank of Canada (BOC) and the European Central Bank (ECB), each of which is expected to cut interest rates by 25 basis points.
