The US dollar continued to experience weakness, demonstrating the second consecutive weekly drop versus the euro and the fourth against the Great Britain pound and the New Zealand dollar. The major reason for this weekly decline was poor economic data from the United States.
There were several worse-than-expected macroeconomic reports over the week, but most important of them was the revision of gross domestic product that demonstrated a huge contraction by 2.9 percent in the first quarter of this year. The data followed last week’s remarks from the Federal Reserve about probability of low interest rates for a long period and a downward revision of US growth projection from the International Monetary Fund. This week’s indicators support the less-than-optimistic outlook for the US economy and monetary policy.
Meanwhile, the New Zealand dollar continued to demonstrate strength as the weakness of its US counterpart helped the kiwi. The currency retained its appeal to traders even after the drop by the end of the week.
EUR/USD advanced from 1.3591 to 1.3647 this week. GBP/USD rose from 1.7013 to 1.7039 following the drop to the weekly low of 1.7051. USD/JPY dropped from 102.07 to 101.41. NZD/USD jumped from 0.8698 to 0.8779.
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