Dollar Slips on Weakened Rate Hike Bets Amid Iran Tensions
The US dollar has weakened against most major currencies as traders reduced their expectations of near-term monetary tightening. The euro and sterling have risen to multi-month highs, while the Australian and New Zealand dollars have also firmed up.
Data released last week showed a decline in US retail sales for the first time in nine months, following unexpected job losses and mild inflation readings. This has led investors to scale back their expectations of a rate hike by the Federal Reserve.
Analysts are cautious about where inflation may head, especially with the Strait of Hormuz remaining shut and an impasse in the talks to end the US-Iran conflict. The escalating Iran-US conflict and closure of the Strait of Hormuz have increased market uncertainty, impacting investor sentiment and supporting other currencies.