US Dollar Hovers Near Three-Month Low Amid Cooling Rate Hike Expectations
The US dollar has been hovering near its three-month low, currently trading at around 98.70, according to recent market data.
This decline is largely attributed to the continued cooling of expectations for Federal Reserve rate hikes, although geopolitical risks and inflationary pressures are providing some support for the currency.
The U.S. Treasury's announcement that it would double the scale of certain long-term bond buybacks initially provided a market boost, but this effect was short-lived as energy prices rose amid escalating tensions between the US and Iran, reigniting inflation concerns.
The probability of at least one rate hike before year-end remains near 68%, according to the CME FedWatch tool, which continues to support elevated U.S. Treasury yields and limit further downside for the dollar.