The U.S. Dollar Index ( DXY ) collapsed below 98.00 amid growing concerns over the health of the American economy and the side effects of the US-Sino trade war on the global economy. The steady sell-off on the equity markets added weight to the sentiments and send the greenback lower across the board.
The new-home sales turned out worse than expected and registered the most significant month-on-month decline in 2019. The purchases of new single-family homes decreased by 6.9% in April, against the forecasted drop of 2.7%. It means that the housing market is losing momentum despite that a spring is traditionally considered a strong selling season.
The poor data renewed the fears that the U.S. economy might slip into a technical recession and reminded investors that the might bring the key interest rates down to counter the economic weakness. Additionally, the US-China trade deal seems more like a distant dream than an achievable goal at this stage.
The above-said factors contributed to the dollar's falling, especially against safe-haven currencies like Japanese Yen and Swiss Franc . However, the sell-off may be limited in the long-run as the worries about the state of the global economy and local weakness of the overseas markets are likely to overshadow the dollar-negative factors.