Dollar Falls to Multi-Month Lows Amid Weakened Rate Hike Bets

The US dollar weakened further on Tuesday against most major currencies as investors reduced their bets on a near-term interest rate hike by the Federal Reserve. The euro eased back from its two-month high of $1.1614 to last fetch $1.1571, while sterling held at $1.3534, just shy of its three-month peak.

Data in recent weeks have indicated a softer US economy, including unexpected job losses and mild inflation readings, leading investors to scale back their expectations for a rate hike by the Fed.

According to the CME FedWatch tool, traders now expect a 35% chance of a rate increase at the Fed's September meeting, down from 52.2% just a week ago.