Dollar Retreats from Two-Month Highs Amid Easing Fed Hike Expectations

The US Dollar retreated from its two-month highs due to a decline in expectations of an October Fed rate hike, falling from 72% to 45%, and lower oil prices.

Despite this pullback, the greenback is ending September with its best performance since June, driven by the Fed's 'hawkish' shift and surging long-term Treasury yields to 24-year highs.

New York Fed President John Williams stated that there is no urgency for further monetary policy changes, citing high inflation as a reason for another rate hike before the end of the year.

The markets have not abandoned the idea of an October rate rise, suggesting the US dollar remains in a strong position.