The US
dollar continued to be driven mostly by monetary policy outlook
during the past trading week. Unfortunately for the currency,
the outlook was not particularly supportive, though it has changed
a bit by the weekend.
The dollar
was rather soft for the most part of the week as most
market participants remained skeptical about chances for the Federal
Reserve to continue monetary tightening in the near future. Fed
minutes released during the week were not
helping as they have
shown division between US policy makers in the view
of appropriate timing to raising interest rates again. Things improved
a bitfor the greenback before the week ended
as comments from various Fed members were starting to convince some
traders that a rate hike is still possible.
Yet
overall, the policy outlook remains unsupportive for the dollar.
According the to the CME
FedWatch site, chances for a hike in December are just
little above 50% while only 12% of speculators bet on a raise
in September. The only saving grace for the US currency is
the fact that monetary policy of other developed nations’ central
banks are also not supportive for their respective currencies.
EUR/USD
rallied 1.4% from 1.1166 to 1.1327, and its weekly high
of 1.1366 was the highest rate since the huge slump on June
24 when the Brexit announcement shocked markets. GBP/USD advanced 1.3%
from 1.2917 to 1.3079. USD/JPY was down from 101.11 to 100.13,
and its weekly low of 99.64 was the weakest rate since November
2013
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