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Dollar stays near multi-month lows as rate-hike bets fade
CME FedWatch shows traders cut the September rate-hike probability to 35% from 52% a week earlier, while Middle East escalation risk keeps sentiment fragile.
Reuters reported the U.S. dollar edged up slightly on Tuesday but held close to multi-month lows as traders pared back expectations for additional Federal Reserve rate hikes.
The euro was last little changed around $1.157 after easing from a two-month high near $1.161, while sterling traded near $1.352 after dipping 0.1% on weaker UK labor-market data.
Reuters said investors have pointed to signs of a softer U.S. economy in recent weeks, including unexpected job losses last month and mild inflation readings, prompting lower rate-hike odds.
At the same time, bond markets have focused on inflation risks tied to the Middle East war and rising fiscal pressures, Reuters added, with concerns centered on the Strait of Hormuz and the U.S.-Iran conflict.