Dollar Down as FOMC Misses Inflation Target

The US dollar experienced mixed results in August 2026 before declining after the FOMC failed to convince markets of its commitment to reaching a 2% inflation target, which it has missed for more than five years.

Following stagnation in Q1 26, the eurozone saw growth of 0.2% in Q2 26, but year-over-year growth remains uninspiring at 0.5%.

The US two-year premium over Canada narrowed, causing the greenback to retreat to slightly below CAD1.4000 in late July.

The Australian dollar rebounded from a three-month low of $0.6865 at the end of June, reaching $0.7045 by the end of July.