Dollar sinks to one-month low amid easing Fed rate hike bets

Dollar sinks to one-month low amid easing Fed rate hike bets

The U.S. dollar sank to a one-month low versus major peers on Friday as traders lowered Federal Reserve rate hike expectations amid signs the central bank might slow or even pause its tightening cycle in the second half of the year.

The dollar index, which measures the greenback against a basket of six major peers, fell as low as 101.43 for the first time since April 25. A rally in Asian stocks also sapped demand for the greenback as a haven.

Against the euro, the U.S. currency also slipped to the weakest since April 25 at $1.0765, and dropped to the lowest against sterling since April 26 at $1.2607.

The risk-sensitive Australian dollar rallied 0.51% to $0.7136, while the New Zealand dollar jumped 0.49% to $0.6510.

The dollar index is headed for a 1.5% drop this week, following last week's 1.37% slide. That would be the first two-week decline since the turn of the year.

It reached a nearly two-decade peak above 105 mid-month, but retreated amid signs that Fed tightening may already be slowing economic growth. Treasury yields have also dropped from multi-year highs, further undermining the dollar.

The dollar weakened 0.3% to 126.69 yen, sliding gradually over the past three weeks from a two-decade