Dollar Falls to Lowest Since June as Rate Hike Bets Fade

The US dollar fell to its lowest level in over two months on Monday as investors reduced bets on interest rate hikes, driven by softer economic data. The euro reached a two-month high at $1.1614, while the yen strengthened 0.2% to around 159.04 per dollar.

The dollar index, which measures the dollar's value against a basket of other major currencies, fell to its lowest since early June. This comes as markets prepare for the Federal Reserve's Jackson Hole symposium next week, where investors will look for clues on policymakers' interpretation of the latest economic data.

Joint efforts by the US and Japan to stem the slide in yen have set up a delicate backdrop for currency markets. The focus has shifted to whether the Bank of Japan will raise rates soon, with some analysts suggesting that intervention changed the path but did not eliminate the interest-rate incentive supporting carry trades.