(Bloomberg) -- The dollar registered its steepest weekly slide since October 2011 on speculation the Federal Reserve isn’t in a hurry to raise interest rates.

The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major currencies, retreated just a week after reaching the highest level since Bloomberg began compiling the data in 2004. The U.S. legal tender tumbled Wednesday after the Fed indicated it will raise rates more slowly than it previously predicted. HSBC Holdings Plc, one of Wall Street’s biggest proponents of the dollar, said the rally may be over.

“This is not time to turn bullish with fanciful forecasts -- most of the meat of the dollar bull-run is done,” David Bloom, global head of currency strategy at HSBC Holdings in London, said in an interview on Bloomberg Television. “The Fed rate hike is in the price. The big motivation behind the dollar bull market has dried up.”

The Bloomberg Dollar Spot Index declined 1.3 percent to 1,195.01 at 4 p.m. in New York. The gauge fell 2.2 percent this week, the first five-day decline since the week ended Feb. 13.

David Fuller's view

I disagree with the opening sentence above.  Instead, I maintain that the Fed almost certainly intervened - obviously surreptitiously - to avoid a cascade of editorial comment, both favourable and unfavourable.  Briefly, Janet Yellen understandably wants to lift short-term interest rates a little higher, with at least one quarter-point increase this year and perhaps also in 1Q 2016, so that she does not have to raise rates during the US presidential election campaign.   

However, she also knows that US GDP will be soft in 1Q, due mainly to Dollar Index strength (weekly & daily) and also the shakeout in shale oil drilling.  An even stronger Dollar and the first steps towards interest rates normalisation would prolong the US economy’s slowdown.  I have been talking about this all week and again in today’s Big Picture Audio. 

(See also: Nasdaq Nears Record, Treasuries Rise as Dollar Weakens, also from Bloomberg.)