US Dollar Index Slips as Soft CPI Dents Fed Rate-Hike Expectations

The US Dollar Index (DXY) came under selling pressure on Tuesday, retreating from recent highs as markets digested softer-than-expected US inflation figures.

The weaker CPI print prompted traders to scale back expectations that the Federal Reserve will deliver an interest rate hike at its upcoming meeting. The shift in rate expectations weighed on the greenback across major currency pairs.

Further downside in the DXY may depend on upcoming economic data and Fed commentary, but the immediate reaction reflects a repricing of monetary policy odds.