U.S. Dollar Rally Was Halted by Week’s End

The U.S. dollar was steadily rising this week against most other major currencies boosted by the concern about Greece’s fiscal crisis, while the good fundamentals showed that U.S. economy is expanding, though by the end of the week the greenback posted a slight drop.

Jean-Claude Trichet, the President of the European Central Bank, refused to buy the government bonds in order to ease Greece’s crisis. At the same time, the U.S. economic recovery was underway, as was signaled by the favorable fundamentals, like the increasing personal income and the expanding manufacturing sector. As a result, those investors, who were worried about the impact of the EU problems on the global economy, were drawn to the dollar by the desire of safety.
By the end of this week the U.S. currency declined somewhat on the speculation that the ECB will take measures to contain the spread of the debt crisis to other European countries. The analysts say that jobs growth should be increasing and the unemployment rate decreasing for some time to be sure that the U.S. economy is strong enough to support the currency.
EUR/USD closed at 1.2730 after opening at 1.3329 and reaching the weekly low of 1.2523. AUD/USD closed at 0.8862 after it opened at 0.9231. GBP/USD closed at 1.4818.

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