The dollar’s monthlong rally ran out of steam this week after remarks from Federal Reserve Chairman Kevin Warsh failed to give the currency a lift. The Bloomberg Dollar Spot Index fell 0.2% on Friday, bringing its weekly decline to the largest since Sept. 4. The greenback weakened against all of its major peers, with the euro advancing and snapping a five-week run of losses.
Investors pared bets on an interest-rate hike later this month after Warsh did not comment on monetary policy or the US economy at the International Monetary Fund’s annual meetings Friday morning in Bangkok. It was the last chance for Warsh to hint at his policy view before the Fed enters a so-called blackout period Saturday prior to its October policy meeting.
“Warsh offered no guidance, which while it should be expected of him at this point, the market is taking it as a signal that the October Fed meeting is likely a no go,” said Noah Buffam, strategist at CIBC Capital Markets. Traders’ expectations for a rate hike at this month’s policy meeting have fallen to 20% from 30%.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing