Less Hawkish Fed Makes Week Miserable for Dollar

The US dollar has ended the week on a weak footing, being the biggest loser among major currencies. The reason for the underwhelming performance was the monetary policy announcement from the Federal Reserve.

The Fed did not announce any changes to its policy, making no surprise to market participants. Yet the central bank found the way to shock markets as it scaled back the outlook for monetary tightening, predicting fewer interest rate hikes compared to the previous estimate. The dollar has crashed after the announcement, though the currency were trying to recover during the last trading day of the week.

Several other central banks were conducting their policy meeting this week as well. The Swiss National Bank and the Bank of England stayed put, the same as the Fed. The Norwegian central bank, on the other hand, made a move, cutting its key rate.

EUR/USD advanced 1.1% from 1.1145 to 1.1267. USD/JPY dropped from 113.90 to 111.52. USD/CAD declined from 1.7% from 1.3226 to 1.3001.

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