Investing.com - The dollar regained lost ground against most of the other major currencies on Friday, rebounding from multi-week lows hit in the previous session in the wake of the Federal Reserve’s decision to hold off from hiking interest rates.
The greenback sold off sharply after the U.S. central bank left short-term interest rates unchanged on Thursday, amid concerns over soft inflation and the effects of recent market volatility on the U.S. economy.
The Fed said it wanted to see "some further improvement in the labor market," and be "reasonably confident" that inflation will increase before hiking rates.
While the decision was not completely unexpected the Fed’s concerns over the uncertain outlook for global growth rattled financial markets and pressured the dollar lower.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.78% to 95.36 late Friday after falling as low as 94.19 in early trade. The index ended the week 0.2% lower.
The euro was sharply lower against the dollar, with EUR/USD down 1.19% to 1.1298 in late trade, after hitting a three-week high of 1.1459 overnight.
The dollar ended flat against the yen, with USD/JPY at 120.00, having recovered from more than one-week lows of 119.05.
The dollar was also higher against the pound and the Swiss franc, with GBP/USD down 0.4% to 1.5528 and USD/CHF advancing 0.98% to 0.9691 late Friday.
Elsewhere, the Australian and New Zealand dollar were higher, with AUD/USD rising 0.19% to 0.7188 and NZD/USD climbing 0.77% to 0.6396.
In the week ahead, investors will be turning their attention to Wednesday’s index of manufacturing activity from China and surveys on private sector activity from the euro zone for a fresh indication on the strength of the global economy.
Market participants will also be closely watching a speech by Fed chair Janet Yellen on Thursday.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, September 21
Markets in Japan will remain closed for a holiday.
Canada is to publish data on wholesale sales. Later in the day, Bank of Canada Governor Stephen Poloz is to speak at an event in Calgary.
The U.S. is to release a report on existing home sales.
Tuesday, September 22
Markets in Japan will be closed for a national holiday.
Australia is to release figures on house price inflation.
Switzerland is to report on the trade balance.
The U.K. is to produce data on public sector borrowing.
Wednesday, September 23
Markets in Japan will be closed for a national holiday.
China is to reveal the preliminary reading of its Caixin manufacturing index.
The euro zone is to publish preliminary data on manufacturing and service sector activity.
Canada is to release data on retail sales.
European Central Bank President Mario Draghi is to testify on monetary policy before the European Parliament's Economic and Monetary Committee, in Brussels.
Thursday, September 24
New Zealand is to publish a report on the trade balance.
In the euro area, the Ifo Institute is to report on German business climate.
The U.S. is to release data on durable goods orders, initial jobless claims and new home sales.
Fed Chair Janet Yellen is to speak at an event at the University of Massachusetts.
Friday, September 25
Japan is to release data on consumer inflation.
The U.S. is to round up the week with revised data on second quarter economic growth and a revised report on consumer sentiment.