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The U.S. Dollar began showing definite signs of weakening last week “” despite some positive economic numbers from the U.S. housing sector “” as it fell against all the major currencies except for the New Zealand Dollar, which declined by 0.2%.

Dollar Drops Against All Majors Except the Kiwi

The biggest drop in the Greenback was against the Pound Sterling, where the Dollar lost 1.7%. This was followed in magnitude by its change seen versus the Japanese Yen against which the Dollar fell 1.1%.

More moderate U.S. Dollar losses were sustained against the Euro of 0.9%, the Aussie of 0.8% and the Canadian Dollar of 0.7%.

Forex Market Implications

Overall, the few positive U.S. economic releases provided only temporary relief as growth in the American economy continues to wane.

While going long the Euro should probably be avoided due to ongoing financial health issues in the Eurozone, the U.S. Dollar could be cautiously shorted against the commodity currencies.

This goes for the Japanese Yen too, which is nearing new highs against the Greenback. Cable also looks quite bullish after having just broken above a previous major high on the charts at 1.5521 dating from April 15th.

Weekly Recap and Outlook for the U.S. Financial Markets and Dollar – 8/02/2010

The U.S. Dollar declined against every major currency last week with the exception of the New Zealand Dollar which lost only 0.2% against the Greenback. The U.S. currency was particularly weak against the Japanese Yen which tested the 86.00 level last week and the Euro which managed to stay above the important 1.3000 psychological level.          Read full report

Weekly Recap and Outlook for EURUSD – 8/02/2010

EURUSD started the week off making its weekly low of 1.2876 on Monday as the Euro was pressured early in the session. The pair then reversed and began rallying despite positive U.S. New Home Sales coming in better than expected. The rally continued into Tuesday as European stocks showed considerable strength with strong earnings reports from UBS AG and Deutsche Bank, and GfK German Consumer Climate which increased to 3.9 versus 3.6 expected, while German Import Prices increased by 0.9% versus an expected increase of 0.7%. Read full report

Weekly Recap and Outlook for GBPUSD – 8/02/2010

GBPUSD started the week on a soft note making its weekly low of 1.5408 Monday before subsequently rallying sharply. The pair continued the rally Tuesday after U.K. CBI Realized Sales came out at a whopping 33 in July, versus a reading of only 2 expected and the highest level since May of 2007. Cable then paused somewhat on Wednesday despite U.S. Durable Goods Orders coming out weaker than expected. Read full report

Weekly Recap and Outlook for AUDUSD – 8/02/2010

AUDUSD rose again last week as risk appetite continued to favor the commodity currencies. The pair started the week on a positive note Monday, despite news that Australian PPI had risen by only 0.3% last quarter versus an expected rise of 1.2%. AUDUSD then made its weekly high of 0.9067 on Tuesday after the Australian Conference Board Leading Index increased from 0.1% to 0.3% quarter on quarter. Read full report

Weekly Recap and Outlook for NZDUSD – 8/02/2010

NZDUSD began the week on a firm note in spite of the favorable U.S. New Home Sales data that came out on Monday. On Tuesday, the pair made its weekly high of 0.7394 “” a level not seen since January “” before selling off ahead of the release of NBNZ Business Confidence which came out at 27.9, considerably lower than the previous reading of 40.2.  Read full report

Weekly Recap and Outlook for USDJPY –   8/02/2010

USDJPY began the week on a soft note on Monday as the Japanese Trade Balance came out with a surplus of 0.46T versus an expected surplus of 0.54T, with the previous number revised downward to 0.32T from 0.42T. The rate then began climbing on Tuesday despite lower U.S. Durable Goods Orders.    Read full report

Weekly Recap and Outlook for USDCAD – 8/02/2010

USD/CAD traded with increased volatility last week despite a very sparse economic release calendar for Canada. The rate began Monday on a soft note even though U.S. New Home Sales came out better than expected. On Tuesday, the rate made its weekly low of 1.0254 as weaker U.S. CB Consumer Confidence data fueled general Greenback selling. The rate then reversed and began rallying sharply to make its weekly high of 1.0393, also on Tuesday.            Read full report

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