USD falls against majors after softer U.S. retail sales reduce expectations for a September Fed rate increase to 30%.
The U.S. dollar opened the week lower against all major currencies, pressured by Friday’s weaker-than-expected retail sales data. The EURUSD rose 0.18%, GBPUSD gained 0.19%, and AUDUSD led gains with a 0.62% advance. USDJPY edged down 0.05%.
Traders scaled back Fed rate hike expectations after the data, with the probability of a September increase dropping to 30% from 50%. U.S. yields dipped modestly, adding to dollar weakness. The Australian dollar’s rally was amplified by policy divergence, as the RBA maintains a hawkish stance while Fed tightening bets fade.
Technical levels were breached, with AUDUSD breaking above resistance at 0.7100-0.7113 and the 61.8% retracement at 0.7119.