U.S. Dollar Index posts steepest monthly drop since 2009 amid tariff concerns
Dollar Index sinks to 97.75 on trade, Fed signals.
The U.S. Dollar Index (DXY) extended its slide below the 100.0 psychological mark, falling more than 1% on Monday, April 21, to trade near 97.75 during the European session.
This marked its lowest level since March 2022 and added to a nearly 6% loss recorded so far in April—the steepest monthly drop since 2009.
This renewed weakness comes after last week's consolidation between 100.0 resistance and 98.7 support failed to hold. The DXY opened Monday at 98.95 but quickly slipped through the lower boundary of the consolidation range. Technical exhaustion and broad selling pressure continue to define the dollar’s outlook, erasing all the gains accumulated earlier in 2025 when market sentiment briefly shifted in favour of a Trump election victory.
DXY price dynamics (Aug 2024 - April 2025). Source: Tradingview
A key driver behind the sustained decline is escalating concern over the direction of U.S. trade policy. Tariff-related uncertainty surrounding President Trump’s proposals has heightened fears over economic stability, souring investor confidence in the greenback. At the same time, global growth concerns tied to the prolonged U.S.-China trade standoff have added fuel to the bearish momentum.
Fed's hawkish remarks fail to stem DXY’s decline as RSI enters oversold territory
The Federal Reserve has offered little relief to the dollar. Although Fed Chair Jerome Powell maintained a hawkish tone in last week's remarks, warning that trade tariffs could stoke inflation while slowing growth, he also suggested the Fed would wait for greater clarity before adjusting rates. That wait-and-see posture has done little to arrest the dollar's decline.
Technically, the DXY is now trading well below both the 20-day and 50-day exponential moving averages. The daily RSI entered oversold territory last week and continues to trend below 30. On the 4-hour chart, RSI has also dropped into oversold levels, indicating potential for a short-term bounce. However, sustained downside pressure has so far outweighed any recovery attempts.
If the selloff deepens, immediate support lies near 97.50, followed by the 97.00 psychological level. Any potential recovery may first face resistance near the broken 98.00 level, but unless fundamental sentiment shifts, rallies may be limited.
The U.S. Dollar Index stalled near 100 after breaking a short-term triangle pattern. Traders trimmed bets ahead of U.S. retail sales data, adding pressure to the greenback.
