The US dollar fell to its lowest level since May on September 3, after Federal Reserve Governor Christopher Waller made dovish remarks on disinflation. Core inflation measured by the Personal Consumption Expenditures index declined from 4.76% in February to 3.05% in July, while still remaining above the Fed’s 2% target. The yen surged against its major counterparts, driven by the interest rate differential between the Bank of Japan and the Fed. The divergence between Waller’s patient stance and Fed Governor Kevin Warsh’s more hawkish posture adds uncertainty ahead of the September FOMC meeting, with the outcome dependent on August inflation data.
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