United States Dollar Index weakens below 99.00 on Fed repricing, Treasury bond buybacks

The US Dollar Index (DXY) dipped below 99.00, signaling a weakening dollar, amid the Federal Reserve's interest rate decision. This decline comes after traders scaled back bets on a Fed rate hike following unexpected July job losses and subdued U.S. inflation data. Market expectations for a Fed rate increase at the September meeting have dropped to 32.7% from 47% a month prior, according to the CME FedWatch Tool.

The U.S. Treasury has also expanded its bond buyback operations, increasing the maximum size to $4 billion per operation, to curb borrowing costs. Meanwhile, tensions between the U.S. and Iran, along with the Strait of Hormuz conflict, add to the currency's downward pressure. The bearish sentiment is further supported by a technical analysis that shows the DXY trading below the 100-day simple moving average and the middle Bollinger Band.