The US dollar was flat against the euro, fell against the Great Britain pound and rose versus the Japanese yen today. Market analysts believe that the Federal Reserve will continue to extend its accommodative policy as long as unemployment remains high. Such outlook is bearish for the US currency.
The Fed concluded its policy meeting yesterday. The central bank did not change its monetary policy, but said that “growth in economic activity paused in recent months”. Indeed, US gross domestic product fell 0.1 percent last quarter, unpleasantly surprising investors, who were expecting slowdown of growth, but not outright contraction.
The employment data was confusing somewhat. Yesterday, the ADP employment report showed robust growth by 192,000 in January, which was above the economists’ projections of 164,000. Yet today’s data indicated that unemployment claims climbed last week rather substantially.
EUR/USD traded at 1.3572 as of 20:17 GMT today, near the opening of 1.3565. GBP/USD rose from 1.5797 to 1.5859. USD/JPY advanced from 91.05 to 91.37, the highest settlement since June 2010.
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