The US dollar was one of the weakest currencies during the past trading week, though the Japanese yen was actually the weakest due to the relatively optimistic market sentiment.
One of the major reasons for the dollar’s weakness were the comments from US President Donald Trump who criticized Federal Reserve Chairman Jerome Powell for raising interest rates.
Talking about Powell, he was speaking at the Jackson Hole symposium on Friday, saying that the central bank should find a balance, avoiding to raise rates either too quickly or too slowly. While many analysts considered the speech to be rather hawkish, markets reacted to it as if it was dovish.
That was not the only time this week when markets’ reaction was confusing. Immediately after the release of the Fed policy minutes markets interpreted the notes as dovish, but the next day they reversed their stance.
The Australian dollar was volatile over the week due to the political turmoil in Australia, though managed to end the week with small gains after the country got a new leader.
EUR/USD climbed from 1.1437 to 1.1621 over the week. USD/JPY advanced from 110.58 to 111.22, bouncing from the weekly low of 109.77. AUD/USD edged up from 0.7314 to 0.7325, touching the high of 0.7381 and the low of 0.7238 over the week.
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US Dollar Weak After Trump’s Comments, Powell’s Speech
