The dollar languished near a one-month low on Friday and was poised for its worst weekly performance since May as dovish remarks by the U.S. Federal Reserve together with underwhelming economic data took the steam out of a month-long rally.
The dollar index, which measures the greenback against a basket of six other currencies, was last at 91.96 after going as low as 91.855 on Thursday, a level not seen since June 29.
For the week, the index is off 1%, its worst weekly showing since early May. For the month, the index is down 0.5% so far following a 2.8% rally in June.
The dollar’s downtrend began after Fed Chairman Jerome Powell wrong-footed bulls following a policy meeting this week by saying that rate increases were “a ways away” and the job market still had “some ground to cover”.
“While the Fed continued to say it was moving towards winding back its money printing program, the Fed’s move towards this shift looks likely to be slower than previously anticipated,” said Steven Dooley, currency strategist at Western Union Business Solutions.