Dollar falls as investor sentiment improves and Fed signals rate cut

The US dollar weakened against most major currencies after President Donald Trump announced an agreement to help stabilize the Middle East. This also boosted investor appetite for riskier assets. Currencies of such countries as Australia and New Zealand, sensitive to shifts in market sentiment, strengthened following positive news. 

The greenback used to attract demand as a safe haven, but now investors are reallocating funds to less traditional assets. 

The dollar’s direction was also shaped by comments from US Federal Reserve (Fed) officials, including Michelle Bowman and Christopher Waller. They suggested interest rates could be cut in the coming months. Markets are now pricing in over a 20% chance of such a move, according to Reuters. Fed Chair Jerome Powell is set to testify before the US Congress on Tuesday and Wednesday. His statements could have an additional impact on the greenback.