The US dollar weakened yesterday and retained its softness today as the string of poor economic data from the United States led to speculations that the Federal Reserve will not start monetary tightening as early as was thought previously. The greenback retained its gains versus the Japanese yen.
The dollar was experiencing weakness recently due to poor housing data, and the situation remained the same as the durable goods orders report came out worse than was expected. While other indicators were positive, including the Richmond Fed manufacturing index and the Conference Board consumer confidence index, they did not help the US currency to any noticeable degree.
The Federal Open Market Committee has started its policy meeting yesterday and will announce its decision today. It is widely expected that the FOMC will wrap up its quantitative easing program, not waiting for the next month to do so. At the same time, the signs of uneven economic recovery suggest that the Fed will not be in a hurry to start raising interest rates.
EUR/USD traded at about 1.2736 as of 4:48 GMT today after rising from 1.2696 to 1.2733 yesterday. GBP/USD was up from 1.6130 to 1.6140 at the current trading session, while USD/JPY was almost unchanged following yesterday’s rally from 107.85 to 108.11.
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