The Dollar weakened against a basket of currencies on Thursday, pulling back from a more than two-week peak as bets stoked by the Federal Reserve signalling it may raise interest rates in December abated.
The Dollar Index, which tracks the greenback against six major currencies, was down 0.29% at 92.238. After concluding a closely watched two-day policy meeting on Wednesday, the Fed left interest rates unchanged as expected but signalled it still expects one more increase by the end of the year, despite a recent bout of low inflation. The US Central Bank also said it would start to reduce its $4.2 trillion worth of Bond holdings that ballooned through three rounds of quantitative easing.
On Tuesday, Oil prices jumped after Iraq’s Oil minister announced that OPEC and other Crude producers were considering extending or even deepening a supply cut to curb a global glut. They have agreed to reduce output by about 1.8 million bpd until March 2018 in a bid to reduce global Oil inventories and support prices. Iraqi Oil Minister Jabar al-Luaibi said that some producers think the pact should be extended for three or four months, others want an extension until the end of 2018, while some, including Ecuador and Iraq, think there should be another round of supply cuts.
Meanwhile, the Swiss Franc weakened against the Euro, boosted by solid improvement in economic sentiment and as relative calm over North Korea eased demand for perceived Safe-Haven currencies. The Franc, which tends to gain in times of crisis, fell to 1.1565, its lowest level in over two years against the Euro, when the Swiss Central Bank dropped the Franc’s “cap”.