Washington: The dollar plunged by the most in more than three weeks as US data prompted some traders to bet on smaller Federal Reserve interest-rate hikes ahead.
The Bloomberg Dollar Spot Index weakened 1.1 per cent on Friday, the biggest drop since mid-December, after data showed slower-than-expected wage growth and weakness in a key US services gauge.
While the economic indicators prompted some traders to pare back their expectations for the pace of Fed rate increases ahead, others on Wall Street were less convinced “- especially after central bank officials stressed the need to combat inflation.
Federal Reserve Bank of Atlanta President Raphael Bostic said he would be “comfortable” with either a 25- or 50-basis-point rate increase at the moment. Kansas City Federal Reserve Bank President Esther George, meantime, said officials have a tough road ahead in determining policy as they try to balance inflation and employment.