Traders in Pain as Dollar Slumps to Lowest in One Week

The United States dollar retreated to its lowest level in a week as rising geopolitical risks and renewed trade tensions weighed heavily on investor sentiment.

Currency traders moved cautiously, trimming dollar positions amid concerns that diplomatic talks between Washington and Tehran could unravel, potentially escalating tensions in the Middle East.

The greenback came under renewed selling pressure ahead of high-stakes discussions in Geneva involving the United States and Iran.

Market anxiety deepened after President Donald Trump warned of possible military action if negotiations fail to produce meaningful progress.

At the same time, fresh trade friction between the United States and China added another layer of uncertainty to global markets.

Supreme Court ruling adds to market uncertainty

Investor caution intensified following a landmark decision by the Supreme Court of the United States that invalidated existing tariffs.

The ruling has forced businesses, policymakers and global trading partners to reassess the future of U.S. trade policy. The development comes as the White House pushes forward with a 15 percent tariff on global trade, a move that has prompted several economies to weigh retaliatory measures.

Analysts say the court’s decision could encourage trading partners to seek revisions to existing agreements in a bid to secure better terms.

The dollar was also sold during Trump’s State of the Union address, reflecting investor unease over the evolving trade and geopolitical landscape. Still, against most major G10 currencies, the currency remains largely within established trading ranges.

Pound, Euro, Franc gain ground

In the currency markets, sterling strengthened, pushing the dollar to a one-week low of 1.3575 against the British pound, compared to the previous close of 1.3559.

The euro and Swiss franc also firmed. The dollar slipped to three-day lows of 1.1829 against the euro and 0.7711 against the franc, down from prior closing levels.

Analysts suggest that if the downward momentum persists, the dollar could find technical support near 1.21 against the euro and around 0.76 versus the franc.

Safe-haven flows have also supported gold and oil prices, both of which edged higher as traders hedged against escalating geopolitical risks.