Dollar Index Breaks Below Key Level as Market Expects Rate Hike

The US Dollar Index (DXY) broke its resistance level of 99.50 on Friday after posting consecutive soft prints, including a payroll contraction and cooler consumer price reading.

July retail sales fell 0.6% against a consensus for a 0.1% gain, while preliminary August consumer sentiment landed at 51 against a 54.5 consensus.

The Dollar Index had been holding its ground despite these weak data points, but Friday's release was the final nail in the coffin. Futures now carry roughly a 31% chance of a September increase in interest rates, down from near even odds just last week.