Dollar Weakens on Easing Fed Hike Bets

2026-08-18 01:38 By Jam Kaimo Samonte 1 min. read

The dollar index traded around 99.5 on Tuesday, hovering near two-month lows as traders scaled back expectations for a Federal Reserve interest rate hike this year following a run of weak US economic data.

Data released last week showed US retail sales and consumer sentiment declined, while inflation readings remained subdued.

Markets now expect the Fed to hold policy steady in September and are no longer fully pricing in a rate increase by year-end, unlike just a week ago.

Investors are also looking ahead to the minutes of the Fed’s July meeting and Chairman Kevin Warsh’s remarks at the annual Jackson Hole symposium for further clues on the policy outlook.

Meanwhile, traders remained wary of inflation risks as prospects for a new agreement between the US and Iran dimmed after President Donald Trump said he was not interested in extending the interim peace deal.



News Stream
Dollar Weakens on Easing Fed Hike Bets
The dollar index traded around 99.5 on Tuesday, hovering near two-month lows as traders scaled back expectations for a Federal Reserve interest rate hike this year following a run of weak US economic data. Data released last week showed US retail sales and consumer sentiment declined, while inflation readings remained subdued. Markets now expect the Fed to hold policy steady in September and are no longer fully pricing in a rate increase by year-end, unlike just a week ago. Investors are also looking ahead to the minutes of the Fed’s July meeting and Chairman Kevin Warsh’s remarks at the annual Jackson Hole symposium for further clues on the policy outlook. Meanwhile, traders remained wary of inflation risks as prospects for a new agreement between the US and Iran dimmed after President Donald Trump said he was not interested in extending the interim peace deal.
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Dollar Edges Lower as Fed Hike Bets Recede
The dollar index fell to around 99.5 on Monday, declining for a third straight session as cooling US economic data prompted traders to scale back expectations for an imminent Federal Reserve interest rate hike. Data released last week pointed to subdued US inflation, while consumer sentiment and retail sales weakened. Markets now see roughly a 67% probability that the Fed will hold rates in September, up from a below 50% chance priced in a month before. Investors are now awaiting the FOMC’s latest meeting minutes and Fed Chair Kevin Warsh’s speech at the Jackson Hole symposium for further guidance. Traders will also monitor the Empire State Manufacturing Index and NAHB Housing Market Index due later today. The dollar weakened broadly, falling the most against the Australian and New Zealand dollars, as well as the British pound.
2026-08-17