Dollar Drops Below 100 as US Inflation Cools, Fed Rate Hike Delayed

Global markets showed mixed results on Wednesday as investors weighed new signs of slowing US inflation against rising tensions in the Middle East. Data released Tuesday showed that July inflation in the United States came in cooler than analysts had expected. This news pushed the dollar below the key 100-point level for the first time in months, making US goods cheaper for foreign buyers. The softer inflation reading also led traders to push back their expectations for the next interest rate hike by the US Federal Reserve. Most market participants now believe the central bank will wait until December before raising rates again. In Europe, major stock indexes ended the day with small gains, while Asian markets closed with no clear direction. Japan’s Nikkei rose slightly, but China’s Shanghai Composite fell. Investors remain cautious due to ongoing uncertainty in the Middle East, which continues to keep oil prices volatile. Analysts say the combination of easing inflation and geopolitical risk is creating a fragile balance in global trading floors. The dollar’s decline is seen as a positive sign for emerging markets, which often struggle when the US currency is strong. However, traders warn that any sudden escalation in regional conflicts could quickly reverse the current trend.