The US dollar posted gains against other major currencies this week as the positive macroeconomic data improved outlook for the US economy and helped to attract investors to the currency.
This week has brought good news for the US economy and currency, including the shrinking deficits of the trade balance and the federal budget, the rising import and export prices. These were a good signs, much needed after a wave of awful report in the previous weeks. The uncertainty about the debt situation in the European Union also helped the greenback.
There are plenty of dangers ahead for the dollar, though, and Forex traders should be careful when engaging in trades with this currency. Federal Reserve Chairman Ben S. Bernanke signaled that the Fed is going to maintain stimulus as the economy remains too weak. Economists forecast that next week the reports will show decline of the inflation, the retail sales and PPI. Overall, the economic environment in the US still looks far from good.
EUR/USD fell to 1.4346 from 1.4609 during this week. USD/JPY closed at 80.31, little changed from the opening rate of 80.23, after it slipped to the weekly low of 79.68. USD/CHF advanced to 0.8429 from 0.8348, following the drop to the record low of 0.8325. AUD/USD dropped to 1.0534 from 1.0716
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