The dollar fell from an 18-month high as oil prices retreated and investors awaited U.S. inflation data. The dollar index was down 0.37% at 102.18, while markets priced in an 80% chance the Federal Reserve will leave rates unchanged at its October 27-28 meeting.
The dollar slipped on Tuesday as oil prices retreated and investors reassessed the AI-fueled rally that has supported demand for U.S. assets. The dollar index fell 0.37% to 102.18 after reaching 102.61 on Monday, its highest level since April 2025.
Investors awaited the U.S. Consumer Price Index for September, due Wednesday, for clues on the Federal Reserve’s policy path. Markets put the chance of rates remaining unchanged at the October 27-28 meeting at about 80%, up from 51% a month earlier, and priced in about 75 basis points of tightening by late 2027.
The euro rose 0.40% to $1.1198 after touching a roughly 17-month low on Monday, while concerns about France’s fiscal outlook persisted. The yen gained 0.18% to 158.33 per dollar after Japanese wholesale prices rose 6.8% year over year in September, below the 7.6% median forecast.
