The dollar weakened against a basket of major currencies on Monday as expectations grew that the Federal Reserve would cut interest rates in the near future. This shift in sentiment was driven by concerns about slowing global economic growth and recent dovish signals from central bank officials.

The ICE Dollar Index, which measures the dollar’s strength against six major currencies, fell by 0.5% to 96.30. The euro gained 0.6% against the dollar, while the British pound rose by 0.4%.

Analysts attributed the dollar’s weakness to a number of factors, including:

• Growing expectations of a Fed rate cut: Markets are currently pricing in a high probability of a rate cut at the Fed’s July meeting.
• Concerns about global economic growth: Recent data has pointed to a slowdown in global economic activity, which has led investors to seek safe-haven assets.
• Dovish signals from central bank officials: Several Fed officials have recently indicated that they are open to easing monetary policy if the economic outlook deteriorates.

The dollar’s weakness could provide a boost to U.S. exporters, as it makes their products more competitive in international markets. However, it could also lead to higher inflation, as imported goods become more expensive.

Looking ahead, the dollar’s performance will likely depend on the Fed’s policy decisions and the overall state of the global economy. If the Fed does cut interest rates, the dollar could weaken further. However, if the global economy improves, the dollar could rebound.