Dollar Weakens as Rate Hike Bets Dwindle Amid Middle East Tensions

The US dollar has been weak lately due to reduced bets on rate hikes by the Federal Reserve. According to the CME FedWatch tool, traders now expect a 35% chance of a rate increase at the September meeting, down from 52% last week.

This shift in expectations is partly due to recent data pointing to a softer US economy, including unexpected job losses and mild inflation readings.

The dollar's weakness has been offset by safe-haven flows, with the dollar index trading 0.1% higher at 99.62 on Tuesday.