The greenback faces a potential downward trend as concerns over the US budget deficit grow. Financial experts at ING highlight this dynamic, suggesting continued downside risks for the dollar in the near to medium term. This prediction stems from several factors: persistent government spending and revenue shortfalls that contribute to a structural headwind for the dollar; expectations about interest rate adjustments by the Federal Reserve compared to other central banks which can weaken the dollar; and a potential decline in global risk appetite as global economic conditions improve, decreasing demand for the dollar. ING’s analysis underscores the importance of monitoring fiscal health, monetary policy trends, global economic developments, geopolitical stability, and market sentiment for navigating currency fluctuations.