Dollar Drops as Traders Bet on Fed Rate Cuts; Pound and Aussie Surge on Growth Hopes
• The U.S. dollar dropped 0.2% against major currencies on Monday and was on track for its biggest monthly decline in a year
• Traders are betting that U.S. interest rates have peaked and are now focused on when the Federal Reserve may start cutting rates
• This week brings economic data like core PCE inflation, euro zone CPI, and Chinese PMI that could influence rate hike expectations
• The British pound hit a 2-month high against the weaker dollar, extending gains after UK business activity unexpectedly returned to growth
• The Australian dollar reached over a 3-month peak ahead of an expected unchanged interest rate decision from the Reserve Bank of New Zealand on Wednesday