US Dollar Approaches 2-Month Low

2026-08-14 13:25 By Andre Joaquim 1 min. read

The US dollar index fell past 99.6 on Friday, approaching the two-month low of 95.53 on August 7th as the latest economic data limited positions on a Federal Reserve rate hike.

The retail sales control group unexpectedly dropped in July, challenging the view of sharp resilience from US consumers, even though volatile seasonal effects distort the reading.

The results were released after both producer and consumer inflation softened in the period, seemingly pausing the urgency for the Fed to deliver a rate hike in their September meeting.

Still, foreign funds remained relatively underweight on long-dated US Treasury bonds compared to earlier this year on concerns that high price indices and Fed complacency on inflation raised could lift inflation in the longer term.

With the pressure on the currency, the DXY hovered close to its bottom after the US Treasury completed its joint intervention on the foreign exchange market with Tokyo to support the yen.



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US Dollar Approaches 2-Month Low
The US dollar index fell past 99.6 on Friday, approaching the two-month low of 95.53 on August 7th as the latest economic data limited positions on a Federal Reserve rate hike. The retail sales control group unexpectedly dropped in July, challenging the view of sharp resilience from US consumers, even though volatile seasonal effects distort the reading. The results were released after both producer and consumer inflation softened in the period, seemingly pausing the urgency for the Fed to deliver a rate hike in their September meeting. Still, foreign funds remained relatively underweight on long-dated US Treasury bonds compared to earlier this year on concerns that high price indices and Fed complacency on inflation raised could lift inflation in the longer term. With the pressure on the currency, the DXY hovered close to its bottom after the US Treasury completed its joint intervention on the foreign exchange market with Tokyo to support the yen.
2026-08-14
Dollar Eases on Tame Inflation Data
The dollar index fell to around 99.8 on Friday, sliding for the second straight session as subdued US inflation data prompted traders to dial back expectations for a Federal Reserve rate hike in September. Data released Thursday showed US producer prices were unchanged in July, providing further evidence that price pressures are not broadly accelerating following Wednesday’s tame CPI report. Moderating inflation reduces pressure on the Fed to raise interest rates in the near term, with markets now pricing in around a 35% chance of a 25 basis point rate hike in September, down from 55% a week earlier. The latest figures also suggest that the initial inflationary impact of the Middle East conflict and higher energy costs may be fading. However, uncertainty over a potential deal to end the wat and reopen the Strait of Hormuz continues to pose risks to the inflation outlook.
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DXY After PPI Report
The dollar index fell to around 99.9 on Thursday after softer-than-expected US producer inflation eased concerns over renewed price pressures and strengthened expectations for a cautious Federal Reserve policy stance. The Producer Price Index was unchanged in July, missing forecasts for a 0.2% increase, while recent consumer price data also pointed to moderating inflation. As a result, traders increased bets that the Fed will leave interest rates unchanged at its September 15-16 meeting, with markets pricing around a 65% probability of a hold. The latest figures suggest that the initial inflationary impact of the Middle East conflict and higher energy costs may be fading. However, renewed tensions in the region continue to pose risks to the inflation outlook. Meanwhile, weekly jobless claims increased but remained historically low, although recent employment data indicated that the US labor market has been weaker than previously estimated.
2026-08-13