The dollar has ended the week unexpectedly soft, though it managed to gain on the even weaker Japanese yen, as markets did not welcome the mixed employment data from the United States.
While the start of the week was not great for the dollar, dollar bulls felt optimistic. They were expecting decent economic reports, focusing mainly on employment data. And indeed, private report from Automatic Processing Data was solid. And before that, the very good GDP report solidified confidence in the bright future of the US currency.
Yet when non-farm payrolls were released, the confidence and the optimism quickly evaporated. It was a bit surprising considering that the report was not that bad.
It is important to note that chances for an interest rate hike from the Federal Reserve according to CME FedWatch still hang above 90%. That means, while the greenback pulled back, fundamentals are still favoring the currency, thus the dollar is likely to bounce soon.
EUR/USD rose from 1.0610 to 1.0654 over the week. GBP/USD climbed as much as 2% from 1.2470 to 1.2720 — the highest weekly close in two months. USD/JPY managed to gain from 112.80 to 113.44, and its weekly high of 114.80 was the highest since February.
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