FX.co ★ Dollar Suffers Biggest Weekly Loss in Three Months

The dollar index rebounded to 100.3 on Friday but still finished the week down nearly 1.5%, its weakest weekly performance in three months, and extending its monthly loss to 1.3%. The greenback came under pressure as investors increasingly questioned whether the Federal Reserve is doing enough to return inflation to its target. This week, the Fed left the federal funds rate unchanged for a fifth consecutive meeting. Chair Warsh reaffirmed the central bank’s commitment to restoring price stability but provided little clarity on the policy outlook for the rest of the year. In turn, expectations for a September rate hike diminished, though markets are still pricing in roughly a two-thirds chance of a 25-basis-point increase.