American dollar slumps, as market eyeing Fed’s policy meeting


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American dollar slumps, as market eyeing Fed’s policy meeting

On Friday, the 25th of January, 2019, the American Dollar had plunged against all of the seven major currencies including Japanese Yen and Euro, despite dovish comment from ECB's Mario Draghi and an unchanged rate decision from Bank of Japan.

Dollar fell fastidiously against Great Britain Pound, despite Brexit chaos, and closed the day with a plunge of 1.03 percent, as investors had been eyeing the Fed’s policy meeting next week, when the US central bank is widely anticipated to keep the interest rate unchanged after experiencing a nerve-wracking 2018, which posted the worst financial figures since the year of great financial depression and multiple analysts believed that the scales could be limited, if the US central bank did not raise interest rate fourth time amid an ongoing tariff war with China.

On Friday market closure, the American dollar fell 0.07 percent against Japanese Yen, while Euro gained 0.88 percent to 1.1405 against US Dollar, regaining yesterday’s (Jan. 24th) loss, followed by the dovish comment of ECB.

At the week’s closure, the American dollar drained 1.01 percent to 95.27. Apart from that, the American Dollar plunged 1.14 percent against New Zealand dollar to 0.6833, breaching its two-monthly low and Australian Dollar gained 1.25 percent against USD, while the AUD/USD pair closed the week at 0.7182.

As the market is expecting an unchanged interest rate next week, the American dollar may fall further below its key resistance level at 95.06, on a 90-day moving average. Citing optimism over dovish Fed talk next week, a senior market analyst at Wester Union Business Solutions in Washington, Joe Manimbo said, “While the Fed next week may not sound overtly dovish, its tone might emphasize caution and thus do little to alter very low expectations for policymakers to raise rates this year. ”