Dollar sinks to 2-month low as Fed hike odds fade
What's new: Traders now see a 30.6% chance of a September Fed increase, down from 52.2% a week earlier.
The US dollar fell Monday to its weakest level since early June after softer US economic data led traders to scale back expectations for another Federal Reserve rate increase. The dollar index hit a more than two-month low, while the euro rose to about $1.1614, its highest in two months, and the yen strengthened to around 159.15 per dollar. Markets are now focused on next week’s Jackson Hole symposium for signals on how Fed policymakers read recent data. Last week’s surprise drop in US retail sales and tame inflation reduced the perceived urgency for further tightening, though analysts said investors remain alert to incoming data, Fed commentary and tensions in the Middle East.