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Dollar selloff extends as September hike odds slide, Aussie leads

Markets cut September Fed hike odds to around 25% to 30% from roughly 60% earlier in the month, while FX focus shifts to FOMC minutes and Brent testing $90.

Reported · Written up by our desk · Major Pairs

The US dollar extended its selloff into the new week without a fresh negative catalyst, as traders continued to digest the cumulative impact of weaker employment data, softer retail spending, and cooling inflation, according to Action Forex.

Those developments have pushed expectations for a September Fed hike lower, with odds falling from roughly 60% earlier in the month to around 25% to 30%, and the rate path increasingly seen as limited fine-tuning rather than a fresh sustained tightening cycle.

On the currency leaderboard, the dollar sat at the bottom, followed by the yen and the loonie, while the Aussie led and showed signs of acceleration, with the kiwi and Swiss franc next and the euro and sterling in the middle.

Action Forex said the next direction likely depends on two upcoming tests, Wednesday’s FOMC minutes for clues about how hawkish policymakers were beneath the 9-3 vote to hold, and Brent’s attempt to break above $90 despite reported disruption to Hormuz shipping traffic.

Latest closeBrent $88.59 ▲1.8%

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