The dollar was heading for its largest weekly fall since mid-January on Friday as the view took hold among investors that the Federal Reserve will forgo an interest rate hike this month, which would diminish the greenback's appeal to non-U.S. buyers.
and avert a disastrous default also removed a pillar of support for the dollar, which had paradoxically been a key beneficiary of the uncertainty because of its safe-haven status.stoked bets for the central bank to raise rates again next week.
"The problem is we’ve really had quite mixed messages so, yes, more recently we had two officials mentioning a skip in June, but that doesn’t rule out a hike later in the summer, or even in July, so I think that expectation could still keep the dollar supported," she said.on Thursday "it's time to at least hit the stop button for one meeting and see how it goes", referring to the June 13-14 Fed meeting.
Money markets are pricing in a roughly 29% chance of a June hike, down from near 70% earlier in the week.The dollar edged into positive territory against the yen, having logged its longest streak of daily losses against the Japanese currency since last November, with four days of declines. The dollar was last flat at 138.8 yen .
"This clears the last residual bound to everything getting done and dusted by Monday's X-date," said Ray Attrill, head of foreign-exchange strategy at National Australia Bank .
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