The dollar finishes the week lower, after a confusing week. Now that Europe is also out of recession, the dollar’s safe haven attraction has faded, and the high American unemployment rate is forgotten. Each currency takes this weakness differently. Here’s an overview of this week in forex trading.
The dollar fell instantly at the beginning of the week, and didn’t manage to close the gap. The US dollar index fell from 75.77 to 75.20 at the time of writing, close to the close. It now looks more clear: the comeback of the greenback two weeks ago was probably a short episode.
Let’s see how the dollar weakness was felt in different currencies:
- EUR/USD: Traded above 1.50 for some time, before falling temporarily. The return of Europe to growth was digested by the markets only towards the end of day, in a Friday Effect. All in all, EUR/USD is about to close at 1.4922, more than 50 pips higher.
- GBP/USD: If you think that the Euro had a see-saw week, the Pound’s week was a real roller coaster. Dollar weakness turned into a surge which sent it higher, above 1.68. Strong employment figures were immediately overshadowed by dovish remarks from Mervyn King. At 1.6683, GBP/USD is around the resistance line once again, after going wild.
- USD/JPY: The Yen enjoyed good Chinese data and a strong sentiment from the APEC convention. USD/JPY is at 89.50, quite low.
- USD/CHF: The Swissy was 35 pips away from parity, but settled for a smaller gain against the the dollar, closing at 1.0111. Senior SNB member, Thomas Jordan, was very satisfied by the strength of the Swiss economy.
- USD/CAD: The pair broke the 1.06 support line at the beginning of the week, and enjoyed good figures later on. At 1.0416, a move of over 300 pips, the Canadian dollar is the big winner of the week.
- AUD/USD: The Australian economy continues to enjoy excellent economic figures, and this time, it came from growth in employment. The Aussie reached new year-to-date highs, and despite a temporary slip, will probably close higher than last week, at 0.9330 at the time of writing, 3 pips above the YTD high.
- NZD/USD: At 0.7434, the kiwi is about 100 pips higher than last week, enjoying good news from an kiwi dairy company, as well as the greenback’s lack of strength.
That’s it for this week. Weekly forecasts will be published towards the opening of the new week. Have a great weekend
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