To describe the FX market as muddled over the last few days would be to credit it with a wholly unjustified semblance of orderliness. Investors were confident, scared, optimistic, frightened and upbeat, in that order. The dollar's status as a vaguely safe-haven currency meant that it was sold, bought, sold, bought and sold again as investors' mood changed almost with their socks.
The Federal Reserve's decision to keep the target for its Funds rate unchanged at 0.25-0.5% was not a surprise and had no great effect on the dollar. However, the more investors thought about it, the more they began to suspect that the prospect of four more increases this year was out of the window. As that prop crumbled, so did support for the dollar. It lost a net cent and a half to sterling on the week and three quarters of a cent to the euro.