US Dollar Posts Weekly Losses as Economy Looks Bad

The US dollar ended week lower against most major currencies as the US economic data was negative for the whole week. The minutes of the Federal Open Market Committee monetary meeting further weakened the dollar as they showed that the Federal Reserve isn’t planning to increase the interest rates.
The US house market was showing signs of weakness for sometime, but the bad reports about housing starts and building permits, as well as the data about existing home sales, were depressing nevertheless. Even worse were the reports from the Federal Reserve Bank of New York and the Federal Reserve Bank of Philadelphia about the manufacturing sector. The manufacturing was the source of optimism for the US economy for some time and unexpected slowdown of the sector was a very unpleasant surprise. Virtually all other reports were bad too, except for the data about the unemployment claims that showed a decline of the claims for jobless benefits.
The answer to the question “when there’ll be an end to the quantitative easing policy” wasn’t positive for the dollar either. No end for the QE2 is in sight as the FOMC minutes said that the upward inflation pressure is temporary and the stimulus program will be maintained.
EUR/USD closed at 1.4159 after it jumped during the week from 1.4088 to 1.4345. USD/CHF dropped from 0.8926 to 0.8772. AUD/USD went up from 1.0575 to 1.0657. USD/JPY managed to advance to 81.69 from 80.86.

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