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      Dollar Weakens as Traders Anticipate Less Hawkish Fed

      The US dollar is experiencing a decline as the new week begins, continuing a downward trend that started on Friday. Despite oil prices remaining steady in the $80 range and Treasury yields showing little change, the dollar is facing renewed pressure, primarily influenced by expectations surrounding the Federal Reserve's monetary policy.

      In the currency markets, the EUR/USD pair has moved above the 100-day moving average, signaling potential strength for the euro. Buyers are testing the 50.0 Fibonacci retracement level at 1.1586, and if they can maintain this position, it could indicate a stronger upward trend in the coming days. Meanwhile, the AUD/USD pair is also gaining momentum, reaching a two-month high as buyers push past the 100-day moving average, suggesting a possible test of the 0.7200 level soon.

      The GBP/USD pair is trading around 1.3550, with the July high of 1.3558 in sight. A breakthrough above this level could lead to further gains towards the May highs. As traders reassess the Fed's outlook, the likelihood of a rate hike in September has diminished significantly, with current odds showing approximately 29% for a hike and 71% for no change. This shift in sentiment is reflected in the market's pricing of future rate hikes, with expectations for the next increase now pushed to January of next year.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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