“The fact that they didn’t raise rates and wound back expectations for future increases in 2016 has obviously hurt the U.S. dollar,” Derek Mumford, a director at Rochford Capital Pty, told Bloomberg. “That can continue in the very near term.”

The U.S. dollar has previously rallied on expectations for a tighter U.S. monetary policy, which would diminish the amount of dollars sloshing around the economy and prop up the greenback against foreign currencies. However, with Fed backtracking on its interest rate outlook, the dollar is losing some of its previous momentum.

“The falling USD has the characteristics of a pain trade that seems to have further to run,” Morgan Stanley analysts including Hans Redeker, the global head of currency strategy, wrote in a note. However, “for the USD to experience a long-term trend change requires more than a dovish Fed.”

PowerShares DB US Dollar Index Bearish Fund

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