The dollar fell to the lowest level in four weeks after Federal Reserve Chairman Janet Yellen said the recovery in the U.S. labor market is “far from complete,” while repeating the Fed’s statement that asset purchases aren’t on a “pre-set course.”
Financial markets are more at risk from policy makers getting spending and interest rates wrong than rising oil prices, according to investment strategists in Scotland overseeing about 530 billion pounds ($850 billion).
Whether divining Chinese interest rate policy, worrying about U.S. government finances or valuing Spanish bonds, strategists in Edinburgh say one thing is clear about next year: politics trump economics.
The Federal Reserve’s effort to reduce borrowing costs is unlikely to help the housing market enough to bolster the economy, according to Andrew Milligan, Standard Life Investments Ltd.’s head of global strategy.
Washington’s wrangling over a partial government shutdown and lifting the U.S.’s borrowing limit has strategists cutting their forecasts for the dollar for a third straight month, the longest stretch this year.