Dollar Decline: Market Braces Amid Cabinet Controversy and Global Tensions

The U.S. dollar experienced a slide to a one-week low against major currencies, continuing a three-day drop amid controversial Trump cabinet nominations and Russia-Ukraine tensions. Despite initial boosts in traditional safe-haven currencies, market volatility remains, influenced by strong economic data and shifting Federal Reserve rate cut expectations.

The U.S. dollar reached a one-week low against major peers on Wednesday, marking a three-day downward trend as market participants paused after a sharp rally post-Donald Trump's election.

The dollar and other safe-haven currencies, like the yen, experienced a brief boost after Russia's foreign minister pledged to avoid nuclear war, following Moscow's announcement of a reduced nuclear strike threshold. Bitcoin hit an all-time high above $94,000, boosted by anticipated regulatory leniency under Trump's administration.

Despite the dollar index dropping to 106.07, a decline from last week's peak of 107.07, investor focus shifts to contentious Trump cabinet picks and rising odds of slower Federal Reserve rate cuts, as traders adjust expectations and monitor ongoing economic indicators.

(With inputs from agencies.)