The US Dollar Index falls to a two-week low after traders reduce bets on further Federal Reserve tightening this year.
The US Dollar Index (DXY) extended losses on Friday, dropping to 99.70-99.75 as markets scaled back expectations for additional Federal Reserve interest rate hikes. The decline marks a retreat from a two-week high reached earlier in the week.
Prior to the move, the DXY had climbed to near 100.50 amid stronger-than-expected US economic data. Consensus forecasts had anticipated a modest pullback, though the pace of the drop accelerated as Fed rate hike probabilities for December fell below 30%.
Currency markets showed limited immediate reaction, with the euro and yen holding steady against the dollar. Analysts noted the shift in Fed pricing as the primary driver of the move.