Slowing Rate Hike Bets Weaken US Dollar

The US dollar's rebound against major currencies slowed down last week due to decreasing expectations of an immediate rate hike by the Federal Reserve. Economic data releases from the US revealed in-line consumer price inflation and softer-than-expected producer price inflation, tempering Fed rate hike bets.

An unexpected decline in retail sales also weakened the dollar during the week ended August 14. As a result, the US dollar fell against several major currencies, including the euro, British pound, Australian dollar, and Canadian dollar.

However, it rallied against the Japanese yen, Swiss franc, and Swedish krona. The Dollar Index, which measures the dollar's strength against a basket of six currencies, gained 0.13 percent on a weekly basis, closing at 99.67. The EUR/USD pair added 0.10 percent during the week, while the GBP/USD pair rallied 0.32 percent against the greenback.