The US dollar has entered the trading week with a positive bias due to the outlook for monetary tightening from the Federal Reserve. But all positivity was squashed by dovish comments of Fed Chairwoman Janet Yellen.
Previous week’s comments from Fed officials made an impression that an interest rate hike in April or at least in June is very probable. Yet this week’s remarks from Yellen changed the view of economists who now think that the next hike would most likely happen in September at best. Obviously, such shift in the sentiment was negative for the dollar.
Some market analysts had thought that Friday’s release of non-farm payrolls is going to be inconsequential due to the huge impact that the words of the Fed chief have made. Initially, it looked like such way of though was wrong as the dollar firmed after employment data had been released. Yet by the end of trading, the markets indeed shrugged off the positive report, driving the greenback back down against most currencies.
EUR/USD was rising every single day of the trading week, resulting in a big jump by 2% from 1.1160 to 1.1389. GBP/USD opened at 1.4127, rallied to 1.4453 but backed off to 1.4225 by the weekend. USD/JPY tumbled 1.3% from 113.16 to settle at 111.64.
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