Dollar Slumps Over 1% Amid Weaker Inflation and Cooling Labor Market

The US dollar fell more than 1% in July to its worst monthly performance since late 2023, as weaker-than-expected economic data and cautious signals from Federal Reserve officials clouded the outlook for inflation.

The decline was driven by a combination of softer inflation readings, a cooling labor market, and growing expectations that the Fed may begin easing policy sooner than previously anticipated.

The US Dollar Index fell from around 105.5 at the start of July to approximately 104.1 by month's end, a decline of roughly 1.3%.