The US dollar experienced rather poor trading week despite many supportive factors that should have bolstered the currency’s performance. There were negative influences too, and it looks like they have bigger impact on the greenback.
US economic growth unexpectedly stalled, fueling the weakness of the US currency. The major event for the Forex market this week was the policy meeting of the Federal Reserve, and it looked like the policy announcement should have been bullish for the dollar. Yet it seems that continuous stimulus reduction is already priced in and traders paid more attention to the fact that interest rate are expected to remain low for a long time. US non-farm payrolls were another important event for the dollar, and they were positive too. The greenback sharply jumped after the release of the data but lost its gains by the end of the trading session.
It is surprising to see the dollar so weak despite two most important events were so bullish for the currency. Yet the greenback was not able to rally even against the yen, which was also demonstrating softness, let alone versus the very strong pound.
EUR/USD went up from 1.3844 to settle at 1.3870 after falling to the low of 1.3778 during the week. GBP/USD jumped from 1.6803 to 1.6875. USD/JPY closed at 102.22, barely moving from the week’s open of 102.18.
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