The US dollar is facing renewed selling pressure as market participants adjust their outlook on Federal Reserve policy.
The currency's recent strength has failed to sustain momentum, with traders now pricing out the likelihood of an imminent rate hike.
This shift in sentiment comes after a lackluster June jobs report, which has significantly dampened expectations that the central bank will need to tighten monetary policy further to combat inflation.
The greenback is on course to record its largest weekly loss in more than three months.
The decline reflects a broader reassessment of the US economic trajectory, with weaker labor market data suggesting that inflationary pressures may be easing without the need for additional rate increases.
Consequently, the yield advantage that had previously supported the dollar is eroding, leading to a repricing of FX positions across major pairs.