Against a group of its major currency rivals, the greenback struggles as it reaches its 13-month lows. The dollar index indicated that the dollar fell to 94.33, which was below 10% compared from its 14-year high of 103.82 which was set on January 3. The following support levels are indicated at 93.019 and 91.919, which were considered as the dollar’s May and June 2016 low which touches the greenback’s 16-month low.
The dollar’s slump occurred after the United States Federal Reserve’s policy statement was observed to be slightly at ease. In accordance to this, while the Federal Reserve claimed that they are expecting to start reducing its massive holdings of bonds soon. However, an expression was taken by many as a reference for an announcement in September, also, the central bank highlighted weakness in inflation more openly than usual.
In addition, even though the greenback had always been supported by the Federal Reserve’s gradual policy tightening since late 2015, its alleged interest rate advantage has been wearing away as central banks began to look to recover their stimulus in recent months. On the other hand, investors have been eyeing on the euro after Mario Draghi President of the ECB or European Central Bank, mentioned in June that the central bank could possibly tweak its asset purchase.
As a result, the euro ascended to as high as $1.1750 in the early Thursday trade, which is considered as the currency’s highest level since January of 2015.