Trump's deal in doubt, dollar on track for worst week since August

The dollar is heading for its biggest weekly drop in three months as silver investors begin to question the so-called "Trump trade" that has driven the greenback stronger since the U.S. election. The dollar index DXY fell nearly 0.2% in Asian trading on Friday, extending its weekly losses to 1.1%. The dollar has weakened against other G10 currencies this week, with the biggest drop against the yen. "The market is still trying to find a direction for the dollar," said Mingze Wu, a foreign exchange trader at StoneX Financial in Singapore. "We expect the dollar to fluctuate sideways before Trump is sworn in in January next year, and the direction of the dollar will be clearer once Trump announces his policies." Trump's posts on social media have begun to disrupt financial markets, and there are growing concerns that his policies may eventually harm the world's largest economy, causing the dollar's eight-week rally to stagnate. Citigroup's index tracking foreign exchange fund dollar positions climbed to its highest level since August 2023 this week, indicating that long positions may be overextended. (Jinshi)