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U.S. Dollar on Track For Its Lowest Close in Months

The U.S. Dollar Index on Tuesday fell 0.5%, on pace for its lowest 5 p.m. ET level in about four months, with the declines sparked by falling Treasury yields.

The Tuesday retreat extends the dollar’s recent slide, driven in part by a Nov. 14 inflation report powering wagers that the Federal Reserve is set to pull off a soft landing.

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Speeches by Federal Reserve governors Christopher Waller and Michelle Bowman drove U.S. Treasury yields lower on Tuesday. Both speeches emphasized less aggressive monetary policy or dovishness.

Investors now believe there is a greater chance that the U.S. central bank will cut rates in just four months than raise them again in the foreseeable future.

That has helped the dollar to what would be its worst monthly performance since November 2022.

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