The US dollar has started the past trading week with a rally but it did not last long. The currency reversed its movement rather quickly and was moving down for the most part of the week. The Federal Reserve’s policy minutes were the major contributor to the greenback’s weakness.
The dollar started this week’s trading on a strong footing despite negative macroeconomic data. Yet the currency had troubles keeping its strong performance and has completely lost ground after the release of the Fed minutes. While the report had something both for bulls and for bears, the market paid more attention to the dovish parts of the notes. As a result, speculators trimmed their bets on monetary tightening in September, decreasing the attractiveness of the US currency.
The political turmoil in Greece could have helped the greenback, but in practice this did not happen. In fact, some market analysts said that the euro took over the role of a safe haven from the dollar (at least for short while), profiting from bad news, as the greenback has lost its shine.
EUR/USD leaped 2.5 percent from 1.1112 to 1.1384 over the week — the highest weekly close since may. GBP/USD advanced from 1.5650 to 1.5687 after touching the low of 1.5561. USD/JPY sank 1.8 percent from 124.18 to 122.07 — also the weakest settlement since May.
If you have any questions, comments or opinions regarding the US Dollar,
feel free to post them using the commentary form below.