US Dollar Index Range-Bound as Fed Rate Hike Odds Drop to 30%

What happened

The US Dollar Index (DXY) is range-bound near 99.50-100.00 due to cooling inflation. Fed rate hike odds in September dropped to nearly 30%, the lowest since the June 17 FOMC decision. July retail sales are expected to rise 0.1% m/m, and August Michigan sentiment sees unchanged 3.3% long-term inflation expectations.

Why it matters

The drop in rate hike odds reflects cooling inflation pressures. While upcoming data is unlikely to alter the Fed's stance, the market remains sensitive to the interplay between inflation, growth, and geopolitical risks like US-Iran tensions.