The US dollar rallied on Monday despite the lackluster housing data released from the United States. The Forex market continues to digest the policy announcement of the Federal Reserve, and traders are trying to guess when the US central bank is going to start monetary tightening and whether it is going to tighten policy at all.
US existing home sales fell 4.8 percent to the seasonally adjusted annual rate of 5.31 million in August from 5.58 million in July. The figure missed the consensus forecast of 5.5 billion. Yet the negative report had little impact on the performance of the dollar.
What did have impact on the currency were speculations about possible actions of the Fed in the future. While traders are now less certain that the central bank is going to perform monetary firming this year, chance for such an event remains. What is more, several policy makers made dovish remarks over the weekend, helping the dollar to establish bullish bias after the week of unimpressive performance.
EUR/USD fell from 1.1281 to 1.1188 as of 23:58 GMT today. GBP/USD dropped from 1.5522 to 1.5506 while USD/JPY gained from 120.09 to 120.49.
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