The US dollar ended the week the third strongest currency on the Forex market, losing only to the Canadian dollar and the Japanese yen. There were two major events over the week, and both of them were beneficial to the currency.
The meeting between European Union Commission President Jean-Claude Juncker and US President Donald Trump was unexpectedly fruitful, bringing ceasefire in the trade war between the US and the EU. Meanwhile, the policy meeting of the European Central Bank was uneventful, driving the euro lower, and thus helping the dollar. The greenback weakened a bit on Friday as markets were unimpressed by the solid growth of the US economy, but kept most of its weekly gains.
The Canadian dollar also profited from diminishing fear of trade wars, making the currency the strongest for the week. The Japanese yen was the second strongest, bolstered by rising Japanese government bond yields.
The Great Britain pound was rather soft despite prospects for an interest rate hike from the Bank of England in August and the market’s positive reaction to the news that Prime Minister Theresa May took control of the Brexit negotiations.
Among currencies of emerging markets, the Turkish lira caught most attention, slumping after Turkey’s central bank surprised the market by refraining to support the currency with an interest rate hike.
EUR/USD declined from 1.1725 to 1.1653 over the week. GBP/USD attempted to rally, rising from 1.3122 to the weekly high of 1.3213, but retreated and closed at 1.3100. USD/JPY slipped from 111.37 to 111.03, touching the low of 110.59 during the week. USD/CAD fell from 1.3130 to 1.3051, pulling back from the weekly maximum of 1.3191.
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