The US dollar demonstrated a weekly loss for the first time in many weeks. Yet the drop was not as big as it might have been as the risk-negative market sentiment helped the US currency to regain part of its strength by the weekend.
The dollar started the week soft following the big jumps after the positive non-farm payrolls report at the end of the previous week. The greenback was attempting to gain ground, but minutes of the September policy meeting of the Federal Reserve hurt the currency strongly. Still, the dollar was able to gain ground by the end of the week. The US currency did not avoid weekly losses but halted its decline at least.
The future of the dollar is a bit hazy right now. While it is too early to consider abandoning bullish bets altogether, it looks like the currency has lost some of support from the outlook for monetary tightening in the near future. Will the dollar be able to hold ground or will it follow the route of the Great Britain pound and the New Zealand dollar that have entered a long-term downtrend after their respective central banks signaled that they are not in a hurry to raise interest rates? The answer to this question may determine dollar’s performance for a long time.
EUR/USD opened at 1.2512, rose to the weekly high of 1.2791 and closed at 1.2613. GBP/USD ended the week at 1.6061 following the rally from 1.5957 to 1.6227. USD/JPY dropped from 109.71 to 107.74 (as much as 1.9 percent) over the week.
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