Dollar Slips on Dialed-Back Fed Rate Hike Expectations

Dollar Slips on Dialed-Back Fed Rate Hike Expectations Rich Asplund Mon, August 17, 2026 at 10:31 AM EDT 4 min read The dollar index (DXY00) fell to a 2.25-month low today and is down by -0.18%. The dollar extended last week's losses today after a raft of weaker-than-expected US economic news dialed back expectations of tighter Fed policy. The chance of a Fed rate hike next month has dropped to 31% from about 75% in late July. The dollar is also being undercut by reduced safe-haven demand as President Trump appears to have given up on plans for any new major military attack on Iran for the time being, favoring economic pressure instead. Treasury Secretary Bessent said last Friday that the administration will soon announce unprecedented economic measures against Iran that "have never been seen in the history of economic isolation of a country." Yet, the military conflict continues as there were reports that Iran attacked two Abu Dhabi oil vessels in the Strait of Hormuz on Thursday night. More News from Barchart Silver Price Predictions: Why Citi Analysts See Silver Prices Soaring to $90 Soon Reduced Fed Rate Hike Expectations Undercut the Dollar Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. Dollar losses are limited today on some better-than-expected US economic news. The Aug Empire manufacturing survey showed general business conditions unexpectedly rose +5.0 to a 4.5-yea…