Dovish Waller Comments Send US Dollar Plummeting to Lowest Level Since May

The US dollar fell to its lowest level since May on Thursday due to Federal Reserve Governor Waller's dovish remarks, which dampened rate-hike expectations.

Waller stated that some progress has been made on inflation and noted that the interest rate decision in September will depend largely on the August inflation data to be released next week.

This shift in expectations led market participants to reduce bets on a Fed rate hike in September, with swap contracts indicating that the market's current expectation of a 25-basis-point rate hike has dropped to approximately 50% from around 70% earlier this week.

The yen surged about 2% against the US dollar, leading gains among G10 currencies, as investors increasingly bet on a Bank of Japan rate hike and remained vigilant for potential foreign exchange market intervention.