Dollar weakens as traders pare Fed rate-hike bets: Markets Wrap
Pressure on the dollar increased after US government data on Friday showed retail sales fell in July by the most in more than a year as consumers pulled back on purchases
The US dollar weakened across major currency pairs after disappointing economic data and reduced expectations of a Federal Reserve rate hike. Retail sales fell in July, the most in over a year, signaling consumer spending slowdown. Swaps traders now see less than a 30% chance of a rate hike next month, down from about 50% a week ago.
US government bond yields fell, with the two-year note yielding 4.15%. Brent crude oil rose 0.5% to around $89 a barrel due to geopolitical tensions. Equities across Asia-Pacific markets also gained slightly. The dollar's decline is attributed to softer US inflation and renewed pressure from US President Donald Trump's interactions with Fed officials.
Investors are also watching the potential reopening of the Strait of Hormuz, which could impact oil prices after a recent surge. While China's economic data will be released on Monday, economists expect a slowdown in the third quarter, with retail sales and industrial output likely to decline.
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