USD weakens across majors as Fed rate cut bets intensify

The US dollar index (DXY) has declined 0.4% to 101.20 as global markets rally on strengthening Federal Reserve rate cut expectations. Major dollar pairs show broad strength, with EUR/USD advancing to 1.1065 (+0.25%), GBP/USD climbing to 1.3120 (+0.35%), and USD/JPY retreating to 142.80 (-0.30%). The market is now pricing in a 75% probability of a 50 basis point Fed rate cut at the September meeting, up from 60% last week. Asian and European equity markets posted solid gains, with the Nasdaq futures indicating a 0.8% higher open. Microsoft's major cloud computing deal announcement added to positive risk sentiment, further pressuring the safe-haven dollar. Technical analysis shows DXY approaching critical support at 101.00, a break below which could accelerate dollar weakness toward the 100.50 level seen in July.