On Monday, the US dollar spot index fell 0.4%, continuing last week's 2.4% decline and now at its lowest level since October last year, with a cumulative decline of nearly 6% for the year. This decline is due to market concerns about the slowdown in growth caused by the escalating trade friction between Asian powers and the United States.

Unless the trade friction is quickly resolved, it will be difficult for the US dollar to sustain a rebound. "- Dane Cekov, Senior Strategist at Sparebank 1 Markets

Trump denies exemptions, opening up further room for a pullback in the US dollar. Although the US government announced last week a temporary suspension of new tariffs on consumer electronics products such as smartphones and computers, Trump said on Sunday's social media, "No one will be 'let go'

This statement directly negated the market's optimistic expectation of easing tariff policies, and also led to renewed pressure on the US dollar during the Asian trading session on Monday.

At the same time, statements from Federal Reserve officials did not inject too much confidence into the market. The market is reassessing the 'new normal' in the United States, and we cannot determine that endpoint at the Federal Reserve. "- Kashkari, President of the Minneapolis Branch of the Federal Reserve

Institutional views are generally bearish, and the market expects further depreciation of the US dollar. The latest survey shows that nearly 80% of respondents expect the US dollar to continue to decline in the next month, which is the highest bearish ratio since the survey began in 2022;

According to data from the US Commodity Futures Trading Commission, as of April 8th, speculators have further increased their short positions in the US dollar; The US dollar volatility index is approaching a two-year high, indicating an increase in market concerns about exchange rate fluctuations.

We expect the US dollar to continue to weaken, especially against the Japanese yen and the euro. "- Morgan Stanley Strategy Team

The demand for hedging in the market is high, and hedging against the downside risk of the US dollar has become a consensus. The three-month risk reversal index for the US dollar, consisting of 12 major currencies, has fallen to its lowest level since 2020;

The demand for options to hedge against the risk of US dollar depreciation has risen to a five-year high; Goldman Sachs stated that tariff policies are eroding consumer confidence and corporate profit margins, breaking the "American economic exceptionalism" that supports a strong dollar.

If tariffs harm the profits of American businesses and the actual income of consumers, it will shake the fundamental pillars that support the US dollar. "- Kamakshya Trivedi, strategist at Goldman Sachs

Mizuho Bank predicts that the US dollar may still decline by 5% on a trade weighted basis, repeating the trend from 2017-18 and during the pandemic;

The technical chart of the US dollar against major currencies shows that the weak pattern has not changed, especially with the prospect of Trump's tariff policies continuing to intensify;

At the same time, safe haven currencies such as the Japanese yen are benefiting from the inflow of safe haven funds, and the change in the US Japan interest rate differential has also exacerbated the weak trend of the US dollar.

Editor's viewpoint:

The US dollar is undergoing structural adjustment, which is not only rooted in Trump's tariff policy escalation, but also in the global capital market's reassessment of the US policy path, economic prospects, and global role.

Based on current data and market behavior, the US dollar may still face a several month weak cycle.