The US dollar ended the trading week mixed. The greenback fell against commodity currencies and the Japanese yen but gained on its two most liquid rivals — the euro and the Great Britain pound.
The main theme for the US currency remains the outlook for monetary tightening from the Federal Reserve, which stays dubious. The Fed itself is relatively optimistic, believing that interest rates hikes are still possible this year. Markets are skeptical about this, for the most part pricing in no hikes.
Indeed, the minutes of the latest Fed policy meeting were dovish enough to send the dollar lower. But economic data released in the second half of the week was mostly good, increasing chances for a rate hike (according to the CME FedWatch page, chances for a September hike stand at 25%).
EUR/USD dropped from 1.1% from 1.1236 to 1.1129 over the week. GBP/USD fell 1% from 1.4491 to 1.4358. AUD/USD ticked up from 0.7101 to 0.7149. USD/CAD was down from 1.3847 to 1.3768.
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