World Economy

Dollar Hits Five-Month Low as Fed Signals Potential Rate Pause

The U.S. dollar fell to its weakest level since May following comments from Federal Reserve Governor Christopher Waller. Waller suggested the central bank may hold interest rates steady if inflation continues improving, noting that upcoming August inflation data will heavily influence the Fed's next policy decision. The greenback's decline came as the yen strengthened against major currency pairs. Meanwhile, the U.S. services sector expanded, with the Institute for Supply Management's services index rising 1.3 points to 55.4, marking the highest reading since February and exceeding economist forecasts. The broader currency market shift reflects changing expectations around monetary policy timing. The U.S. trade deficit widened in July to its largest level since early 2025, driven by increased imports of technology equipment.