The US dollar looks all set to end the fourth consecutive week in the red against other leading currencies, driven lower by Fed’s insistence to remain dovish for an extended period of time even as economic conditions improve. At the time of writing, the US dollar index DXY is trading around 9

So far this week, the DXY has lost around 0.2% of its value and for the month, the currency has weakened by 2.8%  against its major rivals. This has been the longest decline in the greenback’s value seen since July 2020 when it had weakened for six straight weeks.

This week’s weakness in the US dollar was driven following the latest FOMC meeting when the Fed announced that it would continue with its monetary easing despite the US economy showing signs of recovery as substantial progress on employment was yet to be made. In the previous month, the US dollar had strengthened against other currencies amid rising expectations that the US would recover faster than its peers, which could convince the Fed to reverse its dovish outlook soon.

Analysts, however, remain hopeful that the greenback could recover some of its losses next week on the release of April’s employment report. However, as long as Fed officials continue to reiterate Powell’s stance on monetary easing, the currency could experience weakness against its peers.