Dollar Momentum Downgraded as Market Sees Lower Interest Rate Hike Expectations

The US dollar's momentum indicators have been downgraded after July's loss of jobs and softer inflation gauges.

This has led to a decrease in market expectations for the Federal Reserve's interest rate hikes, with Fed funds futures showing around eight basis points of tightening next month.

However, upcoming US data on industrial output and preliminary August PMI may not have much impact on market expectations.

The dollar index has been testing resistance at 100.00 this month, but has not broken above it yet.