The U.S. Dollar continued showing signs of weakness last week on the back of an overall disappointing set of economic numbers from the jobs sector in the United States.
The Greenback fell significantly against all the major currencies except for the Canadian Dollar, against which it only fell by 0.1%.
Dollar Drops Against All Other Major Currencies
The biggest drop in the Greenback was against the Euro, where the Dollar lost 2.0%. This was followed in magnitude by its change seen versus the Pound Sterling against which the Dollar fell 1.7%.
More moderate U.S. Dollar losses were sustained against the Australian Dollar of 1.5%, the Japanese Yen of 1.2%, the New Zealand Dollar of 1.0%.
Nevertheless, the Canadian Dollar was also rather weak last week, only managing to rise by a comparatively small 0.1% versus the softening U.S. Dollar.
Forex Market Implications
Despite the somewhat mixed economic data seen out of the United States last week, near term prospects for the U.S. Dollar do not look good. Also, the latest Non Farm Payrolls data and the large downward revision to the previous month’s number was also a considerable disappointment to the market.
Furthermore, with low interest rates, the high level of debt in U.S. society, and little hope of that debt ever being paid off, the Dollar continues to represent a great shorting opportunity.
Buying the Euro should probably still be avoided on the basis of ongoing financial health issues in the Eurozone, but the U.S. Dollar could still be cautiously shorted against the commodity currencies like the Aussie, Kiwi and Loonie, as well as the Japanese Yen and the Pound Sterling.
At least in the near-term, staying on the short side of the U.S. Dollar may well be the best way to trade this market.
Weekly Recap and Outlook for the U.S. Financial Markets and Dollar – 8/09/2010
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 – 8/09/2010
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 – 8/09/2010
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 – 8/09/2010
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 – 8/09/2010
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 – 8/09/2010
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 – 8/09/2010
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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