The U.S. dollar weakened on Aug. 14, with the dollar index DXY falling to its lowest level since May after U.S. retail sales came in weaker than expected. The soft data led traders to further scale back expectations for any interest-rate increases later this year, while bond traders also abandoned bets that the Federal Reserve (U.S. central bank) would lift borrowing costs in 2026. The move undermined a tightening narrative that had supported the dollar in recent months and left the currency on track for a sixth weekly decline in the past seven weeks. The latest drop follows an unexpectedly weak labor-market report released last Friday and this week’s moderate inflation data, which together have added to pressure on the greenback.