This week was poor in terms of macroeconomic news from the United States, but this did not prevent the US dollar from fluctuating, sometimes quite wildly. The minutes of the Federal Reserve policy meeting was the major event during the week.
Forex traders were waiting for the Fed minutes, anticipating signs of stimulus tampering in September. The actual release attempted to downplay such expectations, but market participants remained convinced that reduction of quantitative easing is near and such a view drove the dollar up. Yet very quickly economic data made such outlook questionable. Expansion of China’s manufacturing also hurt the greenback, reducing demand for the US currency as a safe haven.
The euro managed to end this week with gains due to signs of economic recovery. The sterling was not so lucky even though the UK economy continued to show signs of growth. The yen suffered from speculations about additional monetary stimulus from Japanese policy makers.
EUR/USD rose from 1.3330 to 1.3383, while its weekly high was at 1.3450 — the highest since February. GBP/USD rallied from 1.5612 to 1.5715 this week, but was unable to keep gains and sank to 1.5580 before the weekend. USD/JPY advanced from 97.60 to 98.65 after falling to 96.90 earlier.
If you have any questions, comments or opinions regarding the US Dollar,
feel free to post them using the commentary form below.
