The U.S. dollar weakened against a basket of major currencies on Monday, following remarks interpreted as dovish from Federal Reserve officials. The comments have led investors to reassess their expectations for future interest rate hikes.

Market Reaction

The dollar index, which measures the greenback against six major peers, fell by 0.3% to 97.00. The euro gained 0.4% against the dollar, trading at $1.1250. The British pound also strengthened, rising 0.5% to $1.3100.

Key Factors

• Federal Reserve Comments: Recent statements from Fed policymakers suggest a more cautious approach to monetary policy tightening.
• Economic Data: Concerns about slowing global growth have contributed to the dollar’s weakness.
• Investor Sentiment: Market participants are adjusting their portfolios in response to the changing economic outlook.

Analysts suggest that the dollar’s near-term trajectory will depend on upcoming economic data releases and further communication from the Federal Reserve.