The Federal Reserve did a better job of managing investors' expectations ahead of this week's monetary policy announcement than they did prior to the September meeting. Four fifths of analysts expected the Fed to increase the target for its benchmark interest rate from 0-0.25% to 0.25-0.5% and that is exactly what happened. There was therefore minimal reaction to the announcement: the dollar simply drifted gently higher.

The anticipation and the subsequent evaluation of the Fed move dominated attitudes towards the dollar throughout the week. Investors noted with only passing interest that US retail sales increased by 0.2% in November and that the headline rate of inflation increased from 0.2% to 0.5%. They were positive about the dollar but not sufficiently so to make the week's top dog. It strengthened by one cent against the euro and by two against sterling.