The U.S. dollar is weaker against major currencies across the board after the Fed hiked rates for the third time since the financial crisis but lacked upgrades to the economic projections. A proactive but patient Fed with other central banks standing pat meant the forward looking forex market came away with a less hawkish view on future interest rates and sold the U.S. dollar.
Comments from members of the U.S. Federal Reserve have put a rate hike in March back on the table. Lack of details on the Trump administration pro-growth policies had reduced the probability of the central bank raising interest rates but the words from Chair Yellen and other influential members now have the market pricing in an 80% probability of a rate increase on March 15.
Safe haven currency bets including the yen, the Swiss franc and to a lesser extent the Swedish crown rose on Tuesday as investors braced for a tensely-awaited speech to Congress by U.S. President Donald Trump.
U.S. President Donald Trump on Thursday spoke positively about a border adjustment tax being pushed by Republicans in Congress as a way to boost exports, but he did not specifically endorse the proposal.
The U.S. dollar had another difficult week as it depreciated against most major pairs. Central banks remained on the sidelines as the Bank of Japan, U.S. Federal Reserve and Bank of England all left their monetary policies unchanged awaiting further data. The Reserve Bank of Australia is up next on Monday, Feb. 6 at 10:30 pm EST. It is anticipated the RBA will not make any changes on its February meeting.
The defining moment of the week for the U.S. Dollar came as the first press conference of the President-elect Donald Trump unfolded. Few details on topics the market cared like infrastructure spending or fiscal stimulus were shared while the most combative aspects of his campaign were in full view.
The markets picked up where they left off last year. The release of the FOMC minutes from the December meeting and President-elect Trump's tweets impacted prices and almost overshadowed the release of the biggest economic indicator: the non-farm payroll report. The U.S. Federal Reserve published the minutes from its December meeting.
Latin American currencies are set for another choppy year in 2017, a Reuters poll showed on Friday, with strategists still scrambling to gauge the impact of Donald Trump's presidency in the United States.
Mexico's central bank confirmed on Friday it had sold dollars during the Asian trading session on Friday, its second intervention the day after it did the same during Mexican and U.S. trading hours to fight a slump in the peso.