The US dollar index fell below 99.6 on Friday, moving closer to the two‑month low of 95.53 reached on August 7, as the latest economic data curbed expectations of further Federal Reserve rate hikes. The retail sales control group unexpectedly declined in July, casting doubt on the narrative of robust US consumer resilience, even if volatile seasonal factors may have distorted the figure.
The data followed softer producer and consumer inflation readings for the same period, easing the perceived urgency for the Fed to raise rates at its September meeting. Nevertheless, foreign investors have remained relatively underweight in long‑dated US Treasuries compared with earlier in the year, amid concerns that elevated price indicators and what is seen as Fed complacency on inflation could entrench higher inflation over the longer term.
Under this pressure, the dollar index (DXY) hovered near its recent lows after the US Treasury concluded a joint foreign‑exchange intervention with Tokyo aimed at supporting the yen.
