The dollar extends its losses due to the Fed's accommodative bets

Overall inflation remained steady at 2.7%, defying expectations of a rise to 2.8% due to tariffs. Meanwhile, core inflation saw a slight increase to 3.1%, marking its highest level in six months. Traders are now anticipating a 94% probability of a 25 basis point cut in September, with another reduction also being considered before the end of the year. The dollar faced additional pressure after White House spokesperson Karoline Leavitt announced that President Donald Trump is contemplating legal action against Fed Chair Jerome Powell regarding his management of renovations at the central bank's headquarters. This has raised concerns about the Fed's independence. As a result, the dollar maintained its losses against the euro and the British pound but regained some ground against the yen and commodity-linked currencies such as the Australian and New Zealand dollars.