Dollar extends losses following its biggest decline in more than three weeks; here's what is fueling the weakness

U.S. dollar extended losses as slower-than-expected inflation data raised hopes for Federal Reserve rate cuts later this year. The greenback dipped sharply against major currencies like the euro, pound, yen, and South Korea’s won, which surged over 1% following U.S.-Korea forex talks. Investors now expect a rate cut by September as the Fed remains cautious. With April’s CPI rising just 0.2%, lower than forecasts, market sentiment quickly shifted. All eyes are now on upcoming U.S. retail sales and Powell’s speech.