The dollar is set for its worst weekly performance since June, driven by mounting frustration with unpredictable US policy decisions. Investors are rattled by the lack of clear direction from Washington ahead of next week's Federal Reserve meeting, creating a policy nightmare for currency markets.

This volatility stems from a mix of fiscal and monetary uncertainty. With the Fed's rate decision looming, traders see the current administration's erratic approach as a major headwind. The dollar's slide reflects broader concerns about US economic stewardship, impacting global trade and investment flows.

Markets now brace for the Fed's guidance, which could either calm or further inflame the currency turmoil. A hawkish stance might offer temporary relief, but until policymakers provide a coherent framework, the dollar remains vulnerable to sharp swings. Investors are watching for any hints of a coordinated strategy.