The US dollar index kept sliding for a second day, hovering near 98.00 in Asian trading on Tuesday. The Dollar Index, which measures the greenback against six major currencies, just doesn’t have much energy right now. Why? Traders aren’t as nervous about the situation in Venezuela. The tension isn’t spilling over, so people are feeling braver about risk.
Here’s what happened: Over the weekend, the US launched a big military operation in Venezuela. President Trump said they captured President Nicolás Maduro and his wife and removed them from the country. On Monday, Maduro pleaded not guilty to US narco-terrorism charges, setting up a messy legal fight. You’d think all this drama would rattle the markets, but honestly, investors seem to be shrugging it off for now.
Weak Manufacturing Data Weighs on the Dollar
The dollar’s not just struggling because of Venezuela. US economic numbers aren’t helping either. The latest ISM Manufacturing PMI dropped for the third straight month, landing at 47.9 in December. That’s the weakest since October 2024 and below what people expected. Anything under 50 means factories are shrinking, not growing.
Production and inventories both slipped, showing demand’s down. Sure, the employment part ticked up a bit, but overall, US manufacturing looks stuck. This kind of news makes people question how strong the US economy really is as 2026 kicks off, and keeps the dollar under pressure.
Fed Signals and What’s Next
On top of all that, comments from Minneapolis Fed President Neel Kashkari pushed the dollar index down even more. He said rates are probably near neutral, inflation’s still too high, and unemployment could climb. Basically, the Fed sounds like it’s staying cautious.
Now, everyone’s watching for big US data this week, especially the Nonfarm Payrolls report. People expect 55,000 new jobs. That number could really sway what traders think the Fed will do next — and decide if the dollar gets a break or keeps slipping.
