Dollar Falls to Two-Month Low as Rate Hike Bets Fade

The US dollar index has dropped to its lowest level since early June as investors reassess their expectations for further Federal Reserve rate hikes.

This comes amid softer economic indicators, including weaker retail sales and benign inflation rates. The euro, on the other hand, has strengthened to around $1.1614, its highest in two months.

The yen also rebounded modestly, supported by joint US-Japan intervention and reduced dollar demand. Traders now assign a significantly lower probability to a Fed rate increase in September.