Dollar Index Plummets as Oil Prices Ease and Rate Hike Bets Build

The dollar index fell by 0.34% on Friday and is on track for its biggest daily percentage drop since September 3, reaching 100.95. This decline comes as oil prices eased, but remain above $100 a barrel, putting upward pressure on inflation.

Comments from central bank officials have boosted market expectations for a more aggressive path of monetary policy, with US Treasury yields increasing as a result. Eugene Epstein, head of trading and structured products at Moneycorp in Stamford, Connecticut, said that the dollar's rally has been 'a little stretched' and is taking a breather.

The euro was up 0.2% at $1.1402 but on pace for a third straight weekly decline. Expectations for a rate hike from the Fed at its October meeting stand at about 66%, according to CME FedWatch, up from about 58% a week earlier.