The dollar was little changed on Friday, holding weekly losses against the euro and yen after a number of Federal Reserve officials said they preferred to hold down interest rates for the foreseeable future.
St. Louis Federal Reserve Bank President James Bullard went even further Thursday, saying that the Fed should consider extending its bond-buying program beyond October to halt the decline in inflation expectations.
The Fed’s rhetoric turned dovish despite yesterday’s positive economic news, including a report from the Labor Department showing jobless claims dropped to their lowest in 14 years.
The buck was holding at $1.2780 versus the euro, having slipped about one percent the week. Earlier in the month the dollar hit a 2-year peak near $1.25, but has since edged lower amid doubts that the European Central Bank will offer stimulus to jump start the moribund Euro area economy.
Today, a member of the European Central Bank’s governing council that the ECB was ready offer further stimulus measures if conditions warranted.
At the same time, Bank of England Chief Economist Andrew Haldane said the U.K. interest rates could remain lower at a record low for a longer period than he expected three months ago.
The dollar weakened slightly to $1.61 versus the sterling, but was up fractionally for the week, nearing its highest in 10 months.
The dollar steadied versus the yen at Y106.70, having fallen from a 6-year peak near Y110 over the past few weeks.