By Gina Lee

Investing.com – The dollar was down on Friday morning and was set for the worst week in nearly two years, as the and .

By 10:31 ET (03:31 GMT), the index that measures the greenback against other currencies fell 0.19%, to 95.19 (3:31 AM GMT), a drop of three weeks.

After the gains of the dollar during the past week, investors were expecting faster-than-expected U.S. Federal Reserve interest rate rises. With its monthly earlier rate decision, the Fed took a cautious stance.

“On the face of it, both the BOE and  ECB met market expectations, with BOE raising rates 25bps to 0.50% and ECB keeping policy unchanged. “Both meetings revealed substantial hawkish shiftings,” Westpac analysts stated in a note.

Inching down 0.1%, the pair dropped to 114.93. Analysts predict that it might join its peers in tightening monetary policies when it makes its decision on its policy next week.

The exchange rate climbed 0.04%, to 0.7143. The Reserve Bank of Australia anticipates faster inflation but it said that it will continue its recovery of wages and living standard by maintaining a dovish approach.

This pair rose by 0.27%, to 0.6676.

The price of the pair remains at 6.3610. Chinese markets will remain closed during Lunar New Year holiday.

It rose by 0.12% to 1.3611. Close to half of the BOE’s policymakers preferred an even larger increase in inflation control.

Euro reached its highest point since January 14th, 2021. Christine Lagarde (ECB President) stated it’s unlikely that interest rates will rise due to rising inflation risks.

“It’s not unreasonable to conclude that the peak of the Fed-ECB policy divergence is past us,” ING analysts told Reuters. The analysts suggested that the last week’s euro low could have been the bottom of this cycle, as market movements were driven by different central bank policy positions.

Investors await the U.S. job report (including ), which will be available later in the afternoon.