This week was good for the US dollar even though macroeconomic data made traders question whether economic recovery in the United States is stable enough. The greenback was higher against most major currencies, but fell versus the Japanese yen.
Europe was the main driver for the gains of the US currency. Spain’s recession, uncertainty caused by elections in various European countries and general fear of the economic crisis forced Forex market participants to seek safety and the dollar was a logical choice. The United States had its share of bad news, most notably poor employment growth, but it didn’t deter the US currency from appreciating. USD/JPY was an exception as the yen is also considered to be a safe currency and even efforts of the Bank of Japan couldn’t change that.
The dollar was rising for the whole week against the euro, the pound and even against the Swiss franc that was once considered another safe haven. Against the yen the moves of the greenback were less straightforward. The US currency fell versus the yen on Monday, attempted to rally in the middle of the week, but failed and sank on Friday.
EUR/USD was down from 1.3235 to 1.3083, GBP/USD slid from 1.6271 to 1.6146 and USD/CHF was up from 0.9073 to 0.9180 this week. Meanwhile, USD/JPY dropped from 80.26 to 79.83, while during the week it managed to rise to 80.61.
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