The US dollar was weak across the board after the speech from Governor Lael Brainard as well as speeches of the members of the Federal Reserve.
While there were hopes that Brainard would become more hawkish, today’s speech suggested that she remained in the dovish camp as the Governor warned about necessity of caution in raising interest rates. She said:
This asymmetry in risk management in today’s new normal counsels prudence in the removal of policy accommodation.
As for other US policy makers who were speaking today, Atlanta Fed President Dennis Lockhart said that there should be “serious discussion of a policy rate increase.” Meanwhile, Minneapolis Fed President Neel Kashkari mentioned in his interview to CNBC:
My view is there doesn’t seem to be huge urgency to do anything frankly
All in all, it seems that markets were unhappy to see dovish tone in comments of some Fed members. That hurt the dollar. Nevertheless, it looks like chances for a rate hike in the near future did not change much, therefore the currency may yet bounce.
GBP/USD rose from 1.3265 to 1.3338 as of 18:54 GMT today. USD/JPY dropped from 102.53 to 101.78. USD/CHF declined from 0.9746 to 0.9715.
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