The US Dollar weakened against major currencies on Friday, with the US Dollar Index (DXY) retreating to the 99.75-99.70 range amid diminishing bets on a Federal Reserve rate hike, according to FX Street. The British Pound strengthened, pushing the GBP/USD pair above the 1.3500 level as investors reacted to the softer dollar.
FX Street highlighted that softer US inflation data and signs of a weakening labor market have raised doubts about an immediate Fed rate increase. OCBC analysts, including Sim Moh Siong and Christopher Wong, pointed to a softer US Producer Price Index and lower US Treasury yields as key factors prompting markets to scale back expectations for a September rate hike.
Investing.com Forex also noted that the pound’s gains reflect growing dovish sentiment around the Fed’s policy outlook. For Japanese investors, these developments may influence currency hedging strategies and cross-border investment flows, particularly amid ongoing volatility in global FX markets.