Dollar Near 2-Week Low
The dollar index fell to 101.6 on Friday, its lowest level in two weeks, and was down around 0.4% for the week, marking its first weekly decline after three consecutive weeks of gains. The greenback came under pressure amid concerns over AI spending in a high-interest-rate environment, which weighed on investor sentiment and triggered a flight to safety early in the week, dragging stocks, bond yields and the dollar lower. On the data front, hotter-than-expected US CPI and PPI readings added to evidence of mounting inflationary pressures. Markets currently price in around an 85% probability of rates remaining unchanged in October, while assigning nearly a 77% chance of a 25bps hike in December. Comments from Fed Chair Warsh at the IMF summit further bolstered expectations of an October rate hold. Warsh declined to signal whether another hike was under consideration, but said hotter-than-expected inflation had not altered his assessment of the US economy.
The dollar index fell to 101.6 on Friday, its lowest level in two weeks, and was down around 0.4% for the week, marking its first weekly decline after three consecutive weeks of gains. The greenback came under pressure amid concerns over AI spending in a high-interest-rate environment, which weighed on investor sentiment and triggered a flight to safety early in the week, dragging stocks, bond yields and the dollar lower. On the data front, hotter-than-expected US CPI and PPI readings added to evidence of mounting inflationary pressures.
Markets currently price in around an 85% probability of rates remaining unchanged in October, while assigning nearly a 77% chance of a 25bps hike in December. Comments from Fed Chair Warsh at the IMF summit further bolstered expectations of an October rate hold. Warsh declined to signal whether another hike was under consideration, but said hotter-than-expected inflation had not altered his assessment of the US economy.