A gauge of the dollar's strength fell to a three-month low before a US inflation report that may reinforce bets the Federal Reserve is nearing the end of its tightening campaign.
The Bloomberg Dollar Spot Index dropped as much as 0.3% to the weakest since April 14 on Wednesday, pressured as the US currency broke below a key 140 level versus the yen. The greenback is approaching its weakest against the Swiss franc since 2015, while the pound is on the cusp of hitting $1.30 for the first time in over a year.
Bullish dollar bets are losing appeal among traders as signs mount that US interest rates may be approaching a peak. The Bloomberg Dollar Spot Index has tumbled more than 10% from its September peak and hedge funds turned negative on the currency for the first time since March.
The greenback's losses this week coincided with a resurgence in other Group-of-10 currencies. The yen, which has the second-largest weighting in the Bloomberg gauge after the euro, was the day's biggest outperformer Wednesday as traders positioned for the possibility that the Bank of Japan may modify its yield curve control policy later this month.
Source: Bloomberg
