Dollar's Descent: Global Currencies Rally Amid U.S. Economic Concerns

The U.S. dollar struggled to recover from steep losses, heading for a weekly fall as investors anticipate negative U.S. economic data following the government's reopening. Despite expectations of a more hawkish Federal Reserve, the dollar hit a two-week low against the euro, reflecting broader market uncertainty.

The U.S. dollar faced challenges in recovering from significant losses on Friday and was set for a weekly decline. This comes as investors awaited U.S. economic data following the government's reopening, anticipating it would highlight a weakening economy.

The overnight decline in the dollar was accompanied by a selloff in U.S. equities and bonds, reminiscent of April's market turmoil. Despite anticipations of a more hawkish Federal Reserve, the dollar fell to a two-week low against the euro and other major currencies.

U.S. economic data is expected to be particularly weak, sparking concerns over economic stability. Investors remain cautious, as this may affect Federal Reserve policy moves going forward. Meanwhile, the yen and other currencies held their ground amid the dollar's struggles.

(With inputs from agencies.)