Investing.com – The dollar swooped lower against its rivals Friday, and looked set to snap a four-week winning streak, after Federal Reserve Vice Chairman Richard Clarida flagged concerns about global growth and delivered somewhat dovish remarks on monetary policy.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.46% to 96.35.
Clarida told CNBC on Friday the Fed is getting closer to a neutral rate — one that neither overstimulates the economy, nor stifles growth — and cited “some evidence” that global economy is slowing.
Clarida’s remarks was viewed as dovish, sending the dollar tumbling, leading some to speculate whether the Fed would pause its gradual rate hikes sooner than expected, despite analysts downplaying the remarks.
RBC said that the market reactions to interpretations of the Fed “seem completely backwards,” as there was “nothing in the economic data has shifted the Fed’s growth and inflation outlook.”
Economic data offered little in the way of support for the greenback, as industrial production fell short of economists’ estimates.
Industrial production, a measure of output at factories, mines and utilities, rose a 0.1% in October, the Federal Reserve said Friday. This was slightly below the 0.2% rise forecast by economists.
A rebound in the pound following its worst slump of the year Thursday also kept a lid on the greenback, as traders were relieved that no additional ministers had resigned from UK Prime Minister Theresa May’s government as she prepares to sell her deal to parliament and could face another leadership challenge.
GBP/USD rose 0.45% to $1.2832, EUR/USD rose 0.72% to $1.1410.
USD/JPY traded fell 0.74% to Y112.81 and USD/CAD fell 0.14% to C$$1.3160. The loonie was underpinned by strong oil prices, which rebounded for a third-straight day Friday.