The greenback stayed on the back foot yesterday, still feeling the heat of the FOMC’s signals for lower interest rates. The Norwegian Krone was yesterday’s main gainer among the G10s, after the Norges Bank hiked rates and signaled further tightening. The BoE maintained its tightening bias as well, but downgraded its GDP estimate for Q2, and acknowledged increased downside risks to economic growth. The pound slid at the time of the release. As for today, following Draghi’s dovish remarks on Tuesday, investors will likely turn their gaze to Eurozone’s PMIs as they try to figure out whether and when the ECB could cut rates.
BoE Maintains Tightening Bias, but Sees Increasing Downside Risks
The dollar continued trading lower against the other G10 currencies on Thursday and during the Asian morning Friday. The main gainers were NOK, CHF, AUD, and JPY in that order, while the currency against which the dollar depreciated the least was GBP.
The greenback stayed on the back foot due to the FOMC's willingness to reduce rates in order to avert an economic downturn. Remember that on Wednesday, the Committee dropped its “patient” language, noting that...
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