Dollar Poised for Weekly Drop as US Inflation Cools, Fed Hike Bets Cut

Dollar Poised for Weekly Drop as US Inflation Cools, Fed Hike Bets Cut

The US dollar is set for a weekly drop, with the dollar index at 100.72, as cooling US inflation data led traders to significantly cut expectations for Federal Reserve rate hikes; July hike chances are now 11% from 25%. Despite this, escalating Middle East tensions have spurred some safe-haven demand for the dollar and pushed oil prices to near one-month highs. Fed officials remain cautious, with Vice Chair Philip Jefferson open to rate hikes if inflation doesn't improve. For Pakistani investors, a weaker dollar typically supports international gold prices, while higher oil could impact local inflation and the USD/PKR.

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