US Dollar Demonstrates Softness Ahead of Important Week

The US dollar showed rather weak performance during the past trading week even as economic fundamentals should have been supportive for the currency. Now traders wait for the next week that may determine the future of the currency in the near term.
The dollar started trading on a weak footing and had problems to rally afterwards. While the currency attempted to go up on Thursday, the greenback quickly halted its advance on Friday as speculations that Greece may reach a deal with its creditors tempered demand for the dollar as a safe investment. As a result, the US currency ended the week with significant losses.
Unlike the previous week, this trading week did not have a major report from the United States. Next week will be different as the Federal Reserve will announce its monetary policy decision on Wednesday. While the vast majority of market participants do not anticipate any change to the policy, the message that the Fed will send to the markets in its statement will be important and may have a big impact on the dollar and other currencies.
EUR/USD rallied 1.3 percent over the week, rising from 1.1102 to 1.1254 and reaching the weekly high of 1.1386. GBP/USD jumped as much as 1.9 percent from 1.5269 to 1.5560. USD/JPY dropped from 125.59 to 123.39.

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