Dollar Hovers Near Multi-Month Lows

The US dollar remained near multi-month lows against most major currencies on Tuesday as traders continued to scale back expectations of near-term monetary tightening by the Federal Reserve, following signs of softer US economic conditions.

The euro fetched $1.1581 in early Asian trading, staying close to the two-month high of $1.1614 reached on Monday. Sterling also remained firm at $1.3548, just below the three-month peak recorded in the previous session.

The Japanese yen remained under pressure near the psychologically important 160-per-dollar level, with the latest trading at 159.46 per US dollar. The yen’s weakness comes despite recent efforts by Japanese and US authorities to support the currency.

The Australian dollar gained 0.11 percent to $0.71119, hovering near its strongest level since early June, while the New Zealand dollar stood at $0.5902.

The dollar’s weakness has been driven largely by changing expectations over the Federal Reserve’s interest-rate path. Recent US economic data, including weaker employment figures, subdued inflation and disappointing retail sales, have encouraged traders to reduce bets on another rate increase in the near term.