USD: Dollar weakness drives lower risk score – DBS

💡 DMK Insight

DBS’s FX risk score hitting a low signals potential volatility shifts ahead. The significant 9.4% depreciation of the US Dollar in 2025 is a key factor here, suggesting a shift in market sentiment that could impact currency pairs heavily tied to the dollar. Traders should be cautious as this could lead to increased volatility in forex markets, particularly for USD-based pairs. With the FX risk score at its lowest since late 2021, it’s worth considering how this might affect your positions. If you’re trading USD/JPY or EUR/USD, keep an eye on support and resistance levels that could be tested as the dollar weakens further. On the flip side, a weaker dollar might boost commodities priced in USD, so watch for potential rallies in gold or oil as well. The immediate focus should be on how the market reacts in the coming weeks, especially if the dollar continues to slide. Key levels to monitor include any significant breakouts or reversals in major currency pairs, which could signal where the market is heading next.