US Dollar Index slides below 101.50 as PCE data dims Fed rate hike prospects

The US Dollar Index (DXY) fell below the 101.50 level during early European trading, currently hovering near 101.40. The move follows the release of US Personal Consumption Expenditures (PCE) inflation data, which reduced the likelihood of additional rate hikes by the Federal Reserve.

Investors interpreted the inflation figures as a sign that the central bank may soon pause or end its tightening cycle. The resulting shift in sentiment weighed on the dollar, pushing the index to its lowest in recent sessions.

The DXY measures the greenback against a basket of six major world currencies, including the euro, yen, and pound. A weaker dollar typically supports risk-sensitive assets and emerging-market currencies.