The US Dollar experiences a slight decline at the beginning of the week following weaker-than-expected Retail Sales data

• The US Dollar begins the week on a weaker note as markets anticipate a high stakes meeting between Trump and Putin on Tuesday.
• Meanwhile, US bond markets are poised for potential shifts ahead of the Federal Reserve meeting on Wednesday.
• The US Dollar Index remains confined within a narrow range following Monday’s US Retail Sales data.

The US Dollar Index (DXY), which measures the USD’s performance against a basket of six major currencies, may experience heightened volatility this week due to geopolitical events and the Federal Reserve’s upcoming meeting. As of Monday, the DXY is trading slightly lower near 103.50 following the release of February’s US Retail Sales data.

On the geopolitical front, a pivotal meeting between US President Donald Trump and Russian President Vladimir Putin is set for Tuesday. According to Bloomberg, Trump stated aboard Air Force One on Sunday that discussions would focus on territorial matters and asset divisions.

Meanwhile, in Germany, a key parliamentary vote on a €1 trillion spending package is scheduled for Tuesday. The initiative aims to bolster Europe’s defense industry, with potential ripple effects across the broader European economy. If an agreement is reached with the Greens, the measure could secure a two-thirds majority in the Bundestag, paving the way for its approval.

On the economic front, market attention will be firmly on the Federal Reserve (Fed) and the Federal Open Market Committee (FOMC) meeting on Wednesday. During this session, each voting member will outline their projections for the central bank’s policy rate in both the near and medium term. Ahead of the Fed’s rate decision and Chairman Jerome Powell’s speech, US Retail Sales for February underwent a sharp downward revision, while the latest data showed no growth.