The US dollar was broadly higher against other currencies during this week’s trading amid speculations that the Federal Reserve may yet resume its monetary tightening.
Several Fed officials were speaking this week, expressing a hawkish outlook. US policy makers talked about possibility of an interest rate hike in the near future and said that markets are wrong in believing that a rate increase is unlikely. Adding to the optimistic outlook was the Friday’s economic reports from the United States, especially the big jump of retail sales.
Despite all the factors, speculators bet on just a 4% probability of a borrowing costs lift-off in June according the CME FedWatch page. Next week is relatively rich on economic data, and traders may change their view depending on how good or bad the reports will be.
EUR/USD dropped from 1.1394 to 1.1311 over the week. AUD/USD was down 1.3% from 0.7355 to 0.7269. USD/JPY climbed 1.4% from 107.05 to 108.63.
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