The US Dollar Index (DXY) fell 10% from its 2025 peak, dropping to 99.40. The decline accelerated with Donald Trump’s inauguration. Tariffs imposed on allied countries like Canada and Mexico sparked market concerns. As a result, reciprocal tariffs announced on “Independence Day” intensified selling pressure. However, Moody’s downgraded the US credit rating to AA1 on Friday, stripping it of its last Triple-A rating. Moody’s joined S&P Global in 2011 and Fitch in 2023 in lowering the rating. 

The House of Representatives passed the “Big Beautiful Bill” with a 215-214 vote. The bill extends the 2017 tax cuts, exempts overtime and tips from taxes, and removes millions from programs like Medicare. The Congressional Budget Office (CBO) estimates the bill will add $3.8 trillion to the deficit over 10 years, increasing the US’s $36.2 trillion debt. The budget deficit is expected to reach 7% of GDP. Consequently, Trump’s tariffs and fiscal health concerns are pressuring the USD. 

DXY Technical Analysis and Market Dynamics 

In the DXY’s daily chart, bullish momentum has weakened. The RSI’s decline has slowed. Support is at 99.10, with resistances at 100 (21 DMA), 100.80 (23.6% Fibonacci), and 101.35 (50 DMA). Without a new trigger, the downward pace may slow. However, investors remain cautious due to fiscal and tariff uncertainties. The Senate’s approval process for the bill will influence the USD’s direction. 

Economic data has had limited impact on the DXY. Federal Reserve officials Susan Collins and Raphael Bostic indicated no rush to cut rates. Tuesday’s Conference Board consumer confidence report is critical. Recent data showed declining confidence due to labor market and inflation concerns. Still, markets are focused on debt growth and tariff effects. 

Trump’s tariffs have shaken global investors’ confidence in US assets. Moody’s downgrade heightened debt sustainability concerns. As a result, gold prices surged 23% due to safe-haven demand. The EUR strengthened against the USD, reaching 1.138. Investors are questioning US fiscal policies and debt burdens. Fears that tariffs could slow economic growth are fueling the DXY’s decline. Markets are watching the Senate’s stance on the bill and the Federal Reserve’s rate decisions. 

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April Inflation Data: CPI and PPI 

First, the April Consumer Price Index (CPI) report will be released on May 13. This data reveals inflation trends. A low CPI increases the likelihood of Fed rate cuts, boosting the crypto market. However, high inflation strengthens rate hike pressures, pushing the market down. Additionally, the Producer Price Index (PPI) report arrives on May 15. PPI measures production costs and guides Fed policies. High PPI is said to trigger a sell-off wave in crypto assets. 

SEC Crypto Roundtable Conference 

Also, on May 13, the SEC is holding a roundtable conference. SEC Chair Paul Atkins will speak on asset tokenization. The conference will discuss the integration of traditional finance with decentralized finance (DeFi). Positive regulatory messages could rapidly boost the value of assets like Bitcoin and Ethereum. On the other hand, signals of strict regulation may spark fear in the market. This event will chart the crypto market’s course. 

Powell’s Speech and Additional Data 

Finally, Fed Chair Jerome Powell will speak on May 15. Powell’s remarks on interest rate policies will shake the market. A dovish speech could lift prices, while hawkish comments may trigger a decline. On the same day, retail sales data will reflect economic strength. Strong data increases rate hike expectations, dragging crypto down. On Friday, the Michigan Consumer Confidence data will be released. High confidence may bolster stocks while overshadowing the crypto market. 

These five events will create volatility in the crypto market. Investors should closely monitor these developments and plan their moves accordingly. 

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