The dollar is headed for its worst week in three months as markets doubt the Fed can act forcefully enough to rein in inflation. The dollar index is on track to decline about 1.2% this week; it rebounded on Friday but remains near a one-month low. The currency has weakened despite a rise in US Treasury yields — normally dollar-supportive — reflecting concerns about Fed credibility after remarks from Fed chair KEVIN WARSH that raised fears the central bank may delay rate hikes and tolerate inflat

The dollar is headed for its worst week in three months as markets doubt the Fed can act forcefully enough to rein in inflation. The dollar index is on track to decline about 1.2% this week; it rebounded on Friday but remains near a one-month low. The currency has weakened despite a rise in US Treasury yields — normally dollar-supportive — reflecting concerns about Fed credibility after remarks from Fed chair KEVIN WARSH that raised fears the central bank may delay rate hikes and tolerate inflation running above target. Long-term US Treasury yields are at their highest since 2007. Gavekal Wealth managing director Randhir Prakash said the simultaneous sell-off in Treasuries and the dollar 'feels very emerging-market-like', with investors expressing dissatisfaction with the US policy path — a headwind for Treasuries and the dollar. Suspected Japanese intervention to support the yen has added further pressure on the dollar.