Dollar Near 2-Week Low

2026-10-16 12:20 By Joana Taborda 1 min. read

The dollar index fell to 101.6 on Friday, its lowest level in two weeks, and was down around 0.4% for the week, marking its first weekly decline after three consecutive weeks of gains.

The greenback came under pressure amid concerns over AI spending in a high-interest-rate environment, which weighed on investor sentiment and triggered a flight to safety early in the week, dragging stocks, bond yields and the dollar lower.

On the data front, hotter-than-expected US CPI and PPI readings added to evidence of mounting inflationary pressures.

Markets currently price in around an 85% probability of rates remaining unchanged in October, while assigning nearly a 77% chance of a 25bps hike in December.

Comments from Fed Chair Warsh at the IMF summit further bolstered expectations of an October rate hold.

Warsh declined to signal whether another hike was under consideration, but said hotter-than-expected inflation had not altered his assessment of the US economy.



News Stream
Dollar Near 2-Week Low
The dollar index fell to 101.6 on Friday, its lowest level in two weeks, and was down around 0.4% for the week, marking its first weekly decline after three consecutive weeks of gains. The greenback came under pressure amid concerns over AI spending in a high-interest-rate environment, which weighed on investor sentiment and triggered a flight to safety early in the week, dragging stocks, bond yields and the dollar lower. On the data front, hotter-than-expected US CPI and PPI readings added to evidence of mounting inflationary pressures. Markets currently price in around an 85% probability of rates remaining unchanged in October, while assigning nearly a 77% chance of a 25bps hike in December. Comments from Fed Chair Warsh at the IMF summit further bolstered expectations of an October rate hold. Warsh declined to signal whether another hike was under consideration, but said hotter-than-expected inflation had not altered his assessment of the US economy.
2026-10-16
Dollar Extends Decline
The US dollar index fell below 102 on Friday, extending losses from the previous session and underperforming other safe-haven assets such as government bonds and precious metals following the recent selloff in technology and artificial intelligence stocks. Markets are increasingly factoring in a potential slowdown in the AI capital expenditure boom, which has been a key driver of the US economy and financial markets. Meanwhile, investors continued to assess the Federal Reserve’s monetary policy outlook, as stronger-than-expected US economic data reinforced expectations of further interest rate hikes. Markets are currently pricing in approximately a 72% probability that the Fed will keep rates unchanged this month, while the likelihood of a December rate hike has risen to 92%. Cleveland Fed President Beth Hammack warned that the central bank might need to raise interest rates more aggressively if public inflation expectations deteriorate significantly.
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DXY Falls on Thursday
The US dollar fell to 102 on Thursday, retreating from an 18-month high as falling Treasury yields weighed on the currency and Federal Reserve officials tempered expectations of an imminent rate increase. Recent economic figures offered little relief on inflation, with US producer prices rising at their fastest pace in more than four years, strengthening bets on tighter monetary policy. However, comments from Fed Vice Chair for Supervision Michelle Bowman and San Francisco Fed President Mary Daly suggested policymakers could wait for additional evidence before deciding on rates at their October 27–28 meeting. Meanwhile, a risk-averse mood supported demand for Treasuries as investors grew concerned about the debt exposure of artificial intelligence companies. Market participants are now looking to further comments from Fed Chair Kevin Warsh for clues on the policy outlook before the central bank’s communications blackout begins on Saturday.
2026-10-15