The dollar was sold across the board after Fed chief Janet Yellen did not mention monetary policy in her long-awaited Jackson Hole speech.
Yellen said that reforms put in place after the crisis started have strengthened financial system without affecting economic growth, with future changes expected to be modest.
As most of observers expected, Yellen said nothing about monetary policy, keeping markets guessing about Fed’s next steps, as most expect one more hike towards the end of the year.
Recent hawkish comments from Dudley and dovish tone from the minutes of the last FOMC meeting remain the only firm signals from Fed for now.
US central bank is likely to keep its policy unchanged in September’s meeting, while current expectations for December’s meeting are around 60% for no change and around 37% for a quarter-percent hike, with bets expected to decrease after Yellen stayed quiet about policy today.
Traders will be focusing FOMC’s September meeting for fresh signals.