The dollar index held around 102.1 on Friday and was set to lose 1.4% this week, declining for the third consecutive week as the Federal Reserve paused its tightening campaign at a time other major central banks are still raising interest rates. Investors are also betting that US interest rates could be nearing their peak as the economy loses momentum and after the Fed skipped a rate hike on Wednesday, but the central bank hinted at two more quarter-point rate increases by the end of the year. Meanwhile, the European Central Bank delivered another 25 basis point rate hike on Thursday and signaled further tightening. The Bank of England is also set to raise rates again at its June policy meeting, a month marked by surprise rate increases from the Reserve Bank of Australia and the Bank of Canada. The dollar is on track to post sharp weekly drops against the euro, sterling and antipodean currencies, while it held its ground against the yen as the Bank of Japan remains dovish.
