The dollar weakened against major currencies as market participants scaled back their expectations for aggressive monetary policy tightening by the Federal Reserve. Recent economic indicators have led investors to believe that the Fed may adopt a more cautious approach to raising interest rates.

Factors Contributing to Dollar Weakness

• Revised Rate Hike Projections: Analysts are now forecasting fewer rate hikes in 2018 than previously anticipated.
• Economic Data: Recent economic data releases have been mixed, prompting a reassessment of the strength of the U.S. economy.
• Global Growth: Strengthening global economic growth is reducing the relative attractiveness of the dollar.

Impact on Markets

The weakening dollar has had a noticeable impact on various markets:

• Commodities: Dollar-denominated commodities, such as oil and gold, have seen price increases.
• Emerging Markets: Emerging market currencies have generally strengthened against the dollar.
• Equities: The stock market has reacted positively to the prospect of slower rate hikes.

Market observers will be closely monitoring upcoming economic data releases and Fed communications for further clues about the future direction of monetary policy.