Currency Tensions: Global Shifts Challenge U.S. Dollar's Dominance

The U.S. dollar nears a five-month low amid erratic trade policies from President Trump and weak economic data. Meanwhile, the euro is strong following Germany's fiscal deal, and the yen remains stable due to the Bank of Japan's signals. The Federal Reserve is expected to keep its policy unchanged.

The U.S. dollar stayed near a five-month low against major currencies on Monday, influenced by President Donald Trump's unpredictable trade policies and weak macroeconomic data.

The euro remained near a five-month high after German parties reached a fiscal deal to boost defense spending and revive growth in Germany. There has been a significant shift in macro markets, as identified by Goldman Sachs analysts.

Global currency dynamics are under stress with challenges to U.S. economic supremacy; key central banks are set for policy announcements this week. The eurozone sees fiscal optimism, while U.S. consumer sentiment drops, reinforcing global trade tensions.

(With inputs from agencies.)