Risk-on sentiment pressures USD as markets await key economic data

The US Dollar Index has weakened 0.5% to 104.20 as risk-on sentiment returns to global markets, with S&P 500 futures up 0.7% and Nasdaq futures gaining 0.9%. The dollar's decline reflects growing uncertainty about Federal Reserve policy direction, with markets pricing in a 65% probability of a September rate cut. USD/CAD has dropped 0.6% to 1.4380, while other major pairs show similar dollar weakness. Traders are positioning cautiously ahead of today's US GDP revision and weekly jobless claims data, which could significantly impact dollar direction. The shift in sentiment follows yesterday's softer-than-expected consumer confidence data (98.7 vs 100.0 expected), raising questions about US economic momentum. Technical analysis shows the Dollar Index approaching key support at 104.00, while equity market strength suggests continued appetite for risk assets over safe-haven dollars.