Dollar Sinks Below 100 as Fed Inflation Fears Rise

The US dollar has reversed its trend after two months of climbing, falling by 1.5% to 99.7 due to waning expectations that the Federal Reserve would take strong actions against inflation.

This decline marks the first monthly drop in two months for the greenback, which had been strengthened by geopolitical risks in the Middle East and regional tensions.

The US Dollar Index measures the value of the dollar against the euro and other foreign currencies, and it has fallen below the 100 threshold for the first time since June 17.

Jane Foley, a senior foreign exchange strategist at Rabobank, stated that the Fed's commitment to fighting inflation under chair Kevin Warsh came into question following his recent meeting.

Foley noted that expectations of further rate hikes over a six-month horizon have shifted from previous views of potential rate cuts this year.