USD fails to hold to gains on Fed talk

The US dollar dropped during the American session erasing daily gains amid comments from Federal Reserve officials. The last one to speak on Monday, ahead of the September 21 decision was Lael Brainard. She said that the case to tighten monetary policy preemptively is less compelling. She also mentioned that inflation was noticeably below the Fed’s target.

Speculations regarding what the Fed could announce next week continue to move markets, with signals pointing toward a rate hike supporting the US dollar while comments about waiting for more information before a rate move tending to favor a decline in the value of the dollar.

The US Dollar index, that measures the US dollar against its main competitors, peaked on Monday at 95.41 but then reversed and turned negative. It bottomed during the second half of the American session at 94.86 and it was about to end the day hovering around 95.00.

Greenback traded in positive during most of the day, particularly against commodity currencies. But then a recovery in crude oil prices and in stocks, favored a bounce to the upside of these currencies. The Dow Jones that started the day with losses was up by 245 points or 1.35% at 18,330.