On Monday, May 14, the dollar fell slightly against the basket of six major currencies, reversing from multi-month highs amid lower forecasts for faster-than-expected monetary tightening by Federal Reserve in 2018.
The US Dollar Index, which represents the value of the dollar relative to a basket of six currencies of major US trading partners, sank by 0.23% to 92.23 at 07:42 GMT.
Last Wednesday, the dollar index jumped to a three and a half-month high before pulling back. It ended the week roughly flat, following three straight weeks of gains.
Weak US inflation data suspended the sharp increase in the greenback. The data led to less confidence in the Fed being more aggressive with rate hikes.
Following its March meeting, the Fed projected two rate hikes this year. However, many investors anticipate the total of three increases in 2018.
On Monday, Cleveland Fed President Loretta Mester said that the Federal Reserve should continue its gradual approach to raising interest rates given that inflation has not yet reached the US central bank’s 2% goal.
The EUR /USD pair was up 0.26% trading at 1.1972.
The greenback rose by 0.12% against the yen to 109.53.
The British pound gained ground, with GBP/USD rising by 0.24% to 1.3576.
Sterling fell to a four-month low against the dollar on Thursday after the Bank of England left interest rates unchanged, but cut its growth and inflation forecasts for 2018 and 2019.
Meanwhile, the Australian dollar climbed by 0.16% against the dollar to 0.7553, continuing its recovery from an eleven-month low.
The New Zealand dollar was still weighed down as the country’s central bank left interest rates on hold and announced the further possibility of both rate raising and lowering. The kiwi slid by 0.19% against greenback to 0.6952.
