The US dollar ended the week as the strongest currency on the Forex market even though fundamentals were not particularly supportive to the currency. It is just things in other parts of the world were even worse, with many countries forecasting slowing economic growth. Commodity currencies were leading the decline due to risk aversion caused by the economic slowdown.
The developments in the Sino-US trade talks looked positive initially due to optimistic comments from US Treasury Secretary Steven Mnuchin. But hopes shattered after US President Donald Trump said that he will not meet his Chinese counterpart Xi Jinping before the March 2 deadline for a trade deal.
The European Commission downgraded its growth forecast in the eurozone for 2019, making investors nervous and less willing to buy riskier assets. The Reserve Bank of Australia also revised its growth forecast of Australia lower. Furthermore, the RBA Governor Phillip Lowe signaled that that an interest rate cut is now looks as likely as a hike, driving the Australian dollar sharply lower just days after the monetary policy statement from the central bank seemed to suggest that Australian policy makers retained cautiously hawkish bias. Meanwhile, the New Zealand dollar got hit by surprisingly poor employment data. As a result, the Aussie and the kiwi were the biggest losers during the past trading week.
EUR/USD dropped from 1.1451 to 1.1329 over the week. AUD/USD sank from 0.7246 to 0.7085, while NZD/USD plunged from 0.6895 to 0.6738.
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US Dollar Ends Week Strongest amid Slowing Global Growth
