The US Dollar gained against the Yen, the Pound and the Canadian dollar, but lost to the others. Here’s a review of the big moves in forex trading this week.
The biggest story was the ongoing recession in Britain, that supplied a huge drop for the Pound on Friday.
The US dollar index lost ground this week, for the third week in a row, and continuing a long term trend that began in mid-March. It dipped under 75 during the week, and is now at 75.42, close to the close…
- NZD/USD reached new highs at the beginning of the week, signalling that a rate hike in New Zealand is possible in next week’s RBNZ meeting. NZD/USD is now at 0.7533, after already being 100 pips higher.
- AUD/USD: Similar to the kiwi, the Aussie gained this week and is now at 0.9220. It also reached higher ground, as high as 0.9327.
- EUR/USD passed the round number of 1.50, but the rise wasn’t convincing. The weekly gain is around 100 pips though. Although it already reached 1.5060, it now struggles under 1.50, and it seems that EUR/USD is out of fuel.
- USD/CHF: The Swiss Franc continued the race to parity, getting 33 pips away this week. The SNB sells the Franc when EUR/CHF reaches low levels. EUR/CHF is at 1.5138, far enough from 1.50. The strength of the Franc against the dollar doesn’t bother the Swiss National Bank. USD/CHF is now at 1.0098, closing with a nice drop this week.
The losers against the dollar
Other currencies have their own problems, and are losing against the dollar.
- USD/CAD gained 200 pips this week. The main issue was the rate decision at the beginning of the week. The BOC was dovish about future rate hikes and also expressed worries about the strong currency. The Canadian dollar plunged after the rate statement, and didn’t recover since then. It now trades at 1.0582.
- USD/JPY: The Yen is losing on ongoing deflation, correlation with the dollar’s weakness, and concerns about the strong currency. A fourth week of gains sent USD/JPY to 92.07.
- USD/JPY: Last but not least, the British Pound supplied the drama of the week, gaining 350 pips on high hopes of recovery during the week, even passing the mighty 1.6660 resistance line. But the ongoing recession sent the Pound down. The comeback of the Pound is gone. Third quarter GDP fell by 0.4% and disappointed everyone. It sent the Pound below the opening point of the week, now at 1.6300.
That’s it for this week. The weekly forecasts will be published toward the opening of the new week. Have a great weekend!Get the 5 most predictable currency pairs