US Dollar Index Hits Two-Month Low Amid Interest Rate Hike Uncertainty

The US Dollar Index (DXY) hit a fresh two-month low at 99.30, extending its losses for the third consecutive day on Monday.

This decline is attributed to investors reassessing their expectations for immediate interest rate hikes by the US Federal Reserve (Fed), following recent benign inflationary figures and a decrease in Retail Sales.

According to data from the CME Group's FedWatch Tool, the odds of a September rate hike have decreased to 30%, down from above 50% one week ago.

Strategists at Brown Brothers Harriman highlight that the USD has 'extended last week's decline triggered by the downward adjustment to Fed funds rate expectations,' but stress that there was 'no fresh catalyst behind today's broad-based USD slump.'