Dollar weakness reveals shifts in global investor sentiment

The dollar fell sharply on Monday, down nearly 50 points against a basket of major currencies as investors expect the Fed to cut interest rates after weak economic data. The US dollar index (DXY) fell below 104.50, down nearly 3% in three weeks. The euro rose 1.2% to $1.0930, supported by improved risk appetite and industrial recovery in the euro zone. The yen and renminbi also rose, reflecting a general weakness in the U.S. dollar. Analysts pointed out that the shift has affected arbitrage trading and boosted demand for high-yield currencies such as the Australian dollar and New Zealand dollar.