Dollar Decline Amid Rate Cut Speculation

The dollar experienced a continued decline for the second consecutive session on Wednesday. This followed a U.S. inflation data release that bolstered expectations of an upcoming Federal Reserve rate cut. Heightened pressure from President Donald Trump for lower interest rates contributed to the sell-off.

The dollar index, which assesses the currency against a group of peers, dropped by 0.2% to a low of 97.81, a mark not seen since July 28. This extended its 0.5% loss seen on Tuesday. Despite increased U.S. consumer prices in July, the effect of Trump's extensive tariffs on goods prices remains minimal.

Political figures like Treasury Secretary Scott Bessent have advocated for significant rate reductions, with discussions around an initial 50 basis point cut. President Trump's criticism of Fed Chair Jerome Powell, alongside potential lawsuits, have further political implications. As the dollar weakens, currencies like the euro and sterling gain strength, while Ethereum breaks financial records.

(With inputs from agencies.)