The U.S. dollar hovered close to a five-month low against its major peers in Asian Market opening trades today, pressured by President Donald Trump\'s erratic trade policies and a run of soft macroeconomic data. There have been \"two stark shifts in macro markets\" over the past month, the first is a \"sharp re-rating lower\" of U.S. assets \"on the back of tariff volatility and the environment of broader policy uncertainty created by the new administration\", while the second is a \"sharp re-rating higher in the fiscal impulse in Germany\". Together, these two shifts pose a significant challenge to the narrative of U.S. exceptionalism that has been a dominant market theme. German Chancellor-in-waiting Friedrich Merz announced on Friday that he had secured the crucial backing of the Greens for a massive increase in state borrowing and the deal will likely be approved by the outgoing parliament this week. It includes a 500-billion-euro ($544 billion) fund for infrastructure and sweeping changes to borrowing rules. The dollar index was little changed to 103.71, less than 0.5% away from a five-month trough of 103.21 reached last Tuesday. The dollar was little changed at 148.70 yen. The euro was fetching $1.0881, slightly off the $1.0947 level it hit last Tuesday for the first time since October 11. The sterling unchanged and trading around Friday’s closing level of $1.2932. The dollar weakened 0.15% to 7.2266 yuan in the offshore market. The Indian rupee opened stronger with a gap of almost 10 paise at 86.90/91 against its previous session’s close of 87.00/01 and is expected to trade between 86.75 – 87.00 band today.
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