The United States dollar hit its fifth week of lows against the greenback Wednesday, mainly hurt by decreasing expectations of a June rate hike from the Federal Reserve. The dollar index, which tracks the currency against a basket of six rivals, shed 0.3 percent to 93.55, after dropping to its lowest in about a month. Against the yen, the dollar fell 0.58 percent to 106.69 yen. It recently climbed against the lows after data was released showing China’s imports beating May forecasts. This all added to the hopes that the economy is stabilizing.
“The dollar continues to remain soggy with June priced out and chances that the Fed will move in July waning.” said senior currency strategist Jane Foley, of Rabobank. “Investors will need some good payrolls data and signs of inflation picking up, before they are convinced that a rate hike in September is on the cards.”
In a speech on Monday, Federal Reserve Chair Janet Yellen failed to specify whether or not the Fed will raise its interest rates over the summer months. Instead, they kept pressure on the U.S. dollar, a currency which had weekend considerably after the U.S. confirm payroll report was released Friday, and showed its slowest job growth in over five years.
The dollar’s weakness was combatted by a euro gain of 0.3 percent to $1.1392, its highest level since early May. After a 2 percent surge Friday, the index had steadied, and investors are no longer keen on buying the currency, amidst worries of the euro zone struggling on a departure of Britain from the EU. Britain will announce whether or not it will stay in the European Union at its referendum on June 23. Sterling gained 0.1 percent at $1.448 after gaining 0.8 percent Tuesday on polls giving it a narrow lead.