U.S. Dollar To Drop Further Before It Turns Around

It hasn’t been good for the US dollar these past few weeks.

As a result of the Fed decision not to raise interest rates in September and with little confidence that it will do so by the end of this year, together with the rise in some industrial commodities the currency was down against most of the major and emerging market currencies for the second consecutive week.

The USD took a strong dive after the FOMC minutes were released on Thursday, and with more dovish news on unemployment rates and economic growth, the prospects of an imminent price hike are fading fast. The Fed minutes highlighted the Central Bank concern with the global economy and indicated that it was in no hurry to hike rates.

The minutes did mention that a rate hike was still on track for 2015 just as Ms. Yellen had claimed during the press conference. But the minutes indicated that the majority of the bank policymakers not eager to initiate the move, and that there were still many concerns across the financial world over the past two months that could, in fact, delay a Fed rate hike well into 2016.

AUD and NZD Strong

The currencies that did the best against the US dollar were the Australian and New Zealand dollars. Both currencies appreciated by about 4% against the greenback with the RBA signaling no strong urgency to cut rates again, and New Zealand drawing support from a recovery in its milk prices.

The yen was the weakest of the majors.