Dollar Drops Slightly on Fed Comments

The dollar had a mediocre performance today losing versus a considerable number of currencies after the nation’s central bank was not so optimistic regarding the U.S. economy recovery, declining appeal for the greenback.

The dollar posted a disappointing performance in a day were equities and commodities markets increased appeal for higher-yielding currencies. The British pound posted another advance versus the greenback as Bank of England‘s policy markers signaled that interest rates in the U.K. are due to be hiked at some point this year. The Federal Reserve stated that a modest economic recovery is taking place in the U.S., fact which traders interpret as a delay in forecasts of interest rate raises, which is certainly declining the attractiveness that fueled a dollar rally versus most of the main traded currencies in December.

As speculations of immediate rate hikes fade away in the U.S., the greenback rates will be more determined by the pace of recovery in the country compared to other economic regions throughout the world, specially in Europe and Asia, where the main U.S. trading partners are located.

EUR/USD traded at 1.4506 as of 20:57 GMT from a previous intraday rate of 1.4480 yesterday, in a session of high volatility for the currency pair. GBP/USD trded at 1.6286 from 1.6171.

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