Dollar Slips to Two-Month Low as Rate Hike Bets Soften

The dollar hit its lowest point in more than two months on Monday as cooling economic data forced traders to recalibrate their expectations for U.S. monetary policy. The shift pushed the euro to a two-month peak and offered a fragile lifeline to the yen, which continues to navigate complex market pressures.

Editorial·August 17, 2026·reads: 1,466

Dollar Slips to Two-Month Low as Rate Hike Bets Soften

The Japanese yen ticked up 0.13% to 159.15 per dollar, holding ground despite domestic growth figures that missed expectations. This modest recovery arrives in the shadow of July’s coordinated currency interventions by U.S. and Japanese authorities, aimed at curbing the yen’s sharp decline. While the dollar index showed signs of life after dipping to levels unseen since early June, the broader trend remains bearish for the greenback as investors eye the upcoming Federal Reserve symposium at Jackson Hole.

Market participants are now weighing whether the Bank of Japan will move toward higher interest rates to fortify its currency. Matthew Tuttle, CEO of Tuttle Capital Management, noted that while the recent interventions altered the immediate trajectory, the fundamental interest-rate incentives driving the carry trade remain firmly in place. With the euro trading at $1.1614—a 0.18% gain—the focus shifts to how global policymakers interpret the latest economic signals.