US dollar drops over 6% amid recession fears

The US dollar is nearing a five-month low as fears of a recession grow. It has dropped more than 6% since January, largely due to concerns about the slowing economy and ongoing trade wars. These factors have hurt consumer confidence and spending, leading to expectations of rising inflation. On Tuesday, the euro rose above $1.09, nearing highs not seen since November. Meanwhile, the Indian rupee remains weak at 87.25 against the dollar, close to its record low. Despite the dollar's recent decline, the Reserve Bank of India has relaxed its control over the currency due to tight liquidity and slowing economic growth. Trade disputes, especially those initiated by President Trump against countries like China and the EU, are causing consumers to save more and spend less. Retail sales in February only grew by 0.2%, which is below economists' predictions. Consumers are concerned about higher prices due to tariffs, with inflation expectations at their highest levels in months. The Federal Reserve is currently monitoring the economic situation closely. It will hold a policy meeting on March 18 and 19, but is expected to keep interest rates steady for now. Although inflation was lower in February, uncertainty around tariffs means a rate cut is not likely in the immediate future. Investors are reacting by selling off shares as they worry about the impact of trade wars on manufacturing and input costs. Overall, the combination of rising prices and trade tensions may influence the Fed's decisions moving forward.