Dollar’s Cracks Are Showing — and the Market Smells Blood

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Dollar’s Cracks Are Showing — and the Market Smells BloodU.S. Dollar Currency IndexTVC:DXYLegendSinceThe dollar’s strength cracked in September as fundamentals turned against the greenback. Cooling U.S. inflation, softer consumer spending, and signs of a slowing labour market gave traders fresh confidence that the Fed’s tightening cycle is over. At the same time, growing chatter about fiscal strain and a possible government shutdown eroded demand for U.S. assets. The Dollar Index drifted lower while EUR/USD and GBP/USD gained ground, supported by steady European inflation data and improving U.K. growth signals. By month’s end, markets weren’t chasing yield — they were repositioning for a world where the dollar no longer leads the charge.