The US Dollar Index remained close to a 13-month trough as FX traders hold onto the sceptic’s view that the Federal Reserve Bank will do little to impact the greenback’s weakened trend. Analysts believe that the Fed will maintain the interest rate at the current level, however the market’s attention will be on any clues as to whether more rate hikes might be forthcoming. Also under close observation will be clues as to the timing of the paring of the Fed’s bond holdings as a result of the QE program it has long embarked upon. One concern is that the recent weak inflation data will send any previously hawkish sentiment back over into the dove’s camp.
As reported at 11:03 am (BST) in London, the EUR/USD was trading at $1.1653, a gain of 0.14%; the pair has ranged from a low of $1.16302 to a peak of $1.16696 in today’s trading session. The AUD/USD is trading higher at $0.7925, just off the opening price. The NZD/USD is trading lower at $0.7427, down 0.12%. The Dollar Index, a gauge of the dollar’s weight relative to major peers, was flat at 93.77 .DXY.
Political Woes Also Weigh on Greenback
The US political scene is also playing a part in the Dollar’s malaise. Investors fear that the investigation into possible collusion by the Trump administration in the months before the US presidential election are hampering Trump’s agenda for tax reform and increased infrastructural spending. The latest news involves the President’s advisor and son-in-law, Jared Kushner, who failed to disclose several meetings with Russia in his various security statements yet insists that he did not collude with Russian officials in an effort to impact the November election.