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Friday, 2 October 2026dailybeirut.com
Economy
The US dollar edged near multi-month lows against major currencies on Tuesday, with fading expectations of near-term Federal Reserve tightening, though sentiment remains fragile amid escalating Middle East conflict risks.
The US dollar stabilized near its lowest levels in several months against most major currencies on Tuesday, as market expectations for near-term monetary policy tightening receded. Yet investor sentiment remained fragile, under pressure from growing concerns over potential escalation of the war in the Middle East.
The euro traded at $1.1581 during early Asian session hours and held close to its two-month high of $1.1614, reached on Monday. The British pound stood at $1.3548, remaining near its three-month peak recorded in the previous session.
US retail sales declined in July—the first drop in nine months—following unexpected job losses in the prior month. This sequence of softer-than-expected economic data prompted investors to scale back expectations for a Federal Reserve interest rate increase.
CME Group’s FedWatch tool shows traders now assign a 35% probability to a Fed rate hike in September, down from 52.2% one week earlier.
Noushad Shah, Head of Fixed Income Sales for Europe, Middle East and Africa at Citadel Securities, stated: “Inflation has remained above target for most of the past five years. While the Federal Reserve may tolerate an annual pace of 2%, that leaves little room for maneuvering in a world facing persistent supply-side shocks.”
The Japanese yen remained just below the 160-per-dollar level, drawing market focus toward the Bank of Japan’s upcoming meeting scheduled for next month. In the latest trading, the yen stood at 159.46 per US dollar.
The Australian dollar rose 0.11% to $0.71119, staying near its highest level since early June. The New Zealand dollar traded at $0.5902 against the US dollar.
