Fed dovishness weighs on dollar
Federal Reserve's unexpected dovish turn this week weighed further on the dollar on Friday.
NEW YORK (AFP) - The Federal Reserve s unexpected dovish turn this week weighed further on the dollar Friday, while the euro also earned support on a turn to optimism on a deal with Greece.
The dollar gave up about one and a half cents on the euro, trading to 1.0821 per euro, its weakness coming on more acceptance of the idea that the Fed is still not in any rush to raise interest rates significantly.
Fed projections from its policy meeting Wednesday show the benchmark Fed funds rate could be at only 0.5 percent at the end of this year, compared to 1.0 percent previously expected, and that the pace of rises should remain slow in 2016.
"The Fed clearly shifted the goalposts pushing rate hike expectations to September or possibly even end of year and that change of policy has taken much of the momentum out of the dollar rally," said Boris Schlossberg of BK Asset Management.
"The only way that EUR/USD resumes its creep towards parity would be if eurozone economic data began to deteriorate once again."
But the euro s relative strength Friday was helped after Greece s promise to provide new plans to reform its bailout.
On Monday Prime Minister Alexis Tsipras will visit Berlin for talks with German Chancellor Angela Merkel, where the pair will discuss their clashing positions on austerity and debt crisis management, amid worries Greece could break from the eurozone.
