Good Week for Dollar Even After FOMC Statement

This week wasn’t bad for the US currency even after the statement of the Federal Market Open Committee signaled that the nation’s central bank will debase the dollar for prolonged time.

The FOMC stated that it’s going to maintain interest rates exceptionally low till at least mid-2013, making the dollar to plummet with this statement. Yet the greenback recovered surprisingly fast after the initial slump. Since this announcement markets have seen several fundamental reports, some were good for the dollar and some were bad. Decreasing unemployment claims and increasing retail sales were definitely good, while growing trade balance deficit and worsening consumer sentiment were rather bad.

Even with all that potential for a downside move, the dollar managed to perform surprisingly well against many major currencies. The euro was weakened by worries about the worsening debt crisis in Europe, the situation in Great Britain isn’t much better and that undermined the pound, while the Swiss franc lost much of its power on the speculation about a possible euro-peg. The yen, on the other hand, outperformed the dollar even as Japan continuously attempts to curb gains of the currency. It looks like many investors prefer the Japanese currency to the greenback in the role of a safe haven after the franc has lost its attractiveness.

EUR/USD fell from 1.4417 to 1.4245, while it reached the low of 1.4103 during this week. GBP/USD were down from 1.6468 to 1.6278 after reaching the weekly low of 1.6110. USD/CHF managed to advance to 0.7779 after falling from 0.7592 to 0.7083. USD/JPY went down from 77.96 to 76.67.

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