US Dollar Index traded lower by 0.4 percent in the last week as markets discounted the outcome of Sep’16 FOMC meeting where the interest rates was left unchanged. The US central bank slowed the pace of future hikes and cut its longer run interest rate forecast to 2.9 percent from 3 percent, but hinted at the possibility of a rate hike by the end of this year.
The committee also reduced its expectations for economic growth and unemployment rate this year to 1.8 percent and 4.7 percent respectively from 2 percent and 4.8 percent. Moreover, disappointing release of existing home sales data form the nation yesterday further acted as a negative factor. From 5.38M in July’16, it decreased to 5.33M in Aug’16. All the above factors dented the demand for US Dollar which made a weekly low of 94.95 and closed at 95.39 levels on Friday.
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