Dollar may weaken as Fed stays less hawkish

The softness of the US currency may only be near term, as ongoing policy divergence could lead to some gains later

Knock-on effect: a softer dollar means some of its G10 pairs are looking stronger


The dollar could show additional signs of weakness in the near term if the Federal Reserve continues to strike a less hawkish tone, says Eric Viloria, currency strategist at Wells Fargo, which came top of last week's one-month forecast table.

While economic indicators in the US show moderate progress, inflation remains below the Fed's targeted 2% and overseas growth continues to be slow, making the central bank cautious about an April interest rate increase.

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