Dollar Wobble Ahead of Key Stimulus Vote as Trade Risks Loom
EN

Download App

  • Market Insights  >  Daily Market Analysis

2 July 2025,02:55

Daily Market Analysis

Dollar Wobbles Ahead of Key Stimulus Vote as Trade Risks Loom

2 July 2025, 02:55

Share on:
FacebookLinkedInTwitterShare
Share on:
FacebookLinkedInTwitterShare

 Key Takeaways:

*Dollar Index trades near multi-month lows amid stimulus uncertainty.

*Trump’s tax bill cleared the Senate; all eyes on House vote July 3.

*U.S. debt and fiscal risk weigh on dollar sentiment.

*Trade tensions resurface, with Trump reaffirming July 9 tariff deadline.


Market Summary:

The U.S. Dollar Index remained under pressure, hovering near its lowest levels in months as investors await clarity on President Trump’s multi-trillion-dollar stimulus and tax reform bill, which just cleared the Senate with Vice President JD Vance’s tie-breaking vote. The bill includes major tax cuts, revisions to Medicaid, and key changes to the SALT deduction.

While Senate approval marked a milestone, its passage in the House remains uncertain. A vote is expected by Wednesday, July 3, and the outcome could significantly shift dollar sentiment. If passed as-is, the bill could be signed into law by July 4. However, if the House pushes for amendments or rejects the proposal, legislative delays could dampen market confidence further.

In parallel, the U.S. debt burden remains a structural concern. A sizable stimulus package may worsen fiscal imbalances, weighing on the dollar’s long-term appeal. Traders are also eyeing potential credit rating risks should fiscal discipline continue to erode.

Trade tensions added to the cautious tone. President Trump reaffirmed his July 9 deadline for imposing higher tariffs on countries that fail to reach trade agreements with the U.S., raising the stakes for Japan and other non-compliant nations. While several major players including the EU, UK, and China have made progress, the threat of new tariffs remains a wildcard for risk sentiment and the dollar outlook.

With multiple risks still unfolding, the dollar is likely to remain under pressure in the near term as markets reassess the outlook for U.S. policy and its implications for global capital flows.

Technical Analysis 

Dollar_Index, H4: 

The U.S. Dollar Index is trading lower following a recent break below prior support. However, technical indicators point to a potential shift in short-term momentum. The MACD suggests diminishing bearish pressure, while the Relative Strength Index (RSI) has rebounded to 35 after approaching oversold territory.

If RSI continues to recover and forms a golden cross, a short-term technical correction could occur. In this scenario, the Dollar Index may attempt to retest the 97.10 resistance level, with further upside potential toward 98.30. Conversely, if downward momentum resumes, support levels at 96.25 and 95.75 remain in focus.


Resistance Levels: 97.10, 98.30
Support Levels: 96.25, 95.75

Step into the world of trading with confidence today. Open a free PU Prime live CFD trading account now to experience real-time market action, or refine your strategies risk-free with our demo account.

Disclaimer

This content is for educational and informational purposes only and should not be considered investment advice, a personal recommendation, or an offer to buy or sell any financial instruments.

This material has been prepared without considering any individual investment objectives, financial situations. Any references to past performance of a financial instrument, index, or investment product are not indicative of future results.

PU Prime makes no representation as to the accuracy or completeness of this content and accepts no liability for any loss or damage arising from reliance on the information provided. Trading involves risk, and you should carefully consider your investment objectives and risk tolerance before making any trading decisions. Never invest more than you can afford to lose.

Start trading with an edge today

Trade forex, indices, metal, and more at industry-low spreads and lightning-fast execution.

  • Start trading with deposits as low as $50 on our standard accounts.
  • Get access to 24/7 support.
  • Access hundreds of instruments, free educational tools, and some of the best promotions around.
Join Now

Latest Posts

Fast And Easy Account Opening

Create account
  • 1

    Register

    Sign up for a PU Prime Live Account with our hassle-free process.

  • 2

    Fund

    Effortlessly fund your account with a wide range of channels and accepted currencies.

  • 3

    Start Trading

    Access hundreds of instruments under market-leading trading conditions.

Please note the Website is intended for individuals residing in jurisdictions where accessing the Website is permitted by law.

Please note that PU Prime and its affiliated entities are neither established nor operating in your home jurisdiction.

By clicking the "Acknowledge" button, you confirm that you are entering this website solely based on your initiative and not as a result of any specific marketing outreach. You wish to obtain information from this website which is provided on reverse solicitation in accordance with the laws of your home jurisdiction.

Thank You for Your Acknowledgement!

Ten en cuenta que el sitio web está destinado a personas que residen en jurisdicciones donde el acceso al sitio web está permitido por la ley.

Ten en cuenta que PU Prime y sus entidades afiliadas no están establecidas ni operan en tu jurisdicción de origen.

Al hacer clic en el botón "Aceptar", confirmas que estás ingresando a este sitio web por tu propia iniciativa y no como resultado de ningún esfuerzo de marketing específico. Deseas obtener información de este sitio web que se proporciona mediante solicitud inversa de acuerdo con las leyes de tu jurisdicción de origen.

Thank You for Your Acknowledgement!