The US dollar index fell by 1.5 percent to the 99.7 level in July, marking its first monthly decline in two months.
The index measures the value of the US dollar against the euro, Swiss franc, Japanese yen, Canadian dollar, British pound, and Swedish krona.
On July 30, the US dollar index fell below the 100 level for the first time since June 17.
Change in the US dollar index during July
Factors driving performance
In the first half of the year, the US dollar index maintained a position at the 100 level due to tariff steps by US President Donald Trump and Middle East tensions that emerged at the end of February.
The US dollar's performance has also been influenced by geopolitical risks in the Middle East and the appointment of the new US Federal Reserve (Fed) Chair Kevin Warsh.
Prior to the July decline, the US dollar index decreased by 1.6 percent in April, increased by 0.8 percent in May, and increased by 2.3 percent in June.
Market reactions to Fed leadership
After the meeting, markets questioned the Fed chair's commitment to fighting inflation.
Jane Foley, Rabobank Senior FX Strategist, stated that the current situation contradicts the market expectation prevalent until this spring that the Fed would implement interest rate cuts this year.
Central bank credibility is a key element supporting any currency.
Piotr Matys, In Touch Capital Markets Senior FX Analyst, said that Fed Chair Warsh's avoidance of making prior commitments regarding interest rate hikes and his press conference remarks may have shaken the Fed's credibility.
Matys also noted that if volatility rises sharply, US Treasury bond yields could spiral out of control.
