Weaker US economic data reduces expectations for a September Fed rate hike, pressuring the USD and lifting EUR and GBP pairs.
The US Dollar Index (DXY) fell to a two-month low below 100.00, driven by disappointing US jobs, inflation, and retail sales data in August. Markets have scaled back bets on a Federal Reserve rate hike next month, weighing on the greenback.
EUR/USD held near 1.1580 after retreating from two-month highs around 1.1614, while GBP/USD remained in the mid-1.3500s ahead of UK jobs data. USD/JPY traded flat near 159.00 following softer Japanese Q2 GDP figures.
Geopolitical tensions in the Middle East supported oil and gold prices, with crude rising over 2% after Iran signaled a shift to an offensive stance in the Strait of Hormuz.