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The U.S. Dollar fell across the board against all the major currencies last week with the exception of the Pound Sterling. The most price action was seen against the commodity dollars with the Aussie, Loonie and Kiwi ending up as the best performers versus the Greenback last week.

Traders reported that the primary piece of data adversely affecting the Dollar’s fortunes was the disappointing ADP Non Farm Payrolls number that came out on Wednesday. The data showed a job loss of -10K which was significantly below the anticipated expected job gain of +20K. To make matters even worse, the preceding number was revised down to 37K from 42K.

Overall, the Greenback lost 1.2% against the Euro, 1.1% against the Yen, 1.2% against the Canadian and New Zealand Dollars and 1.9% against the Australian Dollar. As previously mentioned, the exception to the down week for the Greenback was the Pound Sterling which declined by just 0.3% against the U.S. Dollar.

Markets observers also continued to note the announcement of an increased liquidity injection by the Bank of Japan, as well as fresh stimulus measures by the Japanese finance minister have thus far failed to weaken the Japanese Yen. USDJPY traded just shy of its most recent fifteen year low of 83.57 by falling as far as 83.65 in last week’s trading.

Dollar Performance Mixed Last Week

The largest fall in the Greenback last week against the other majors was seen against the Australian Dollar, where the U.S. Dollar fell by -1.9%. The Aussie strength came on the back of an increased chance of the Labour Party forming a successful coalition in the lower house after the recent election resulted in a hung parliament.

Furthermore, the price of gold approaching its all time high also buoyed the Aussie, as well as the other commodity dollars.

Although the Greenback actually managed to rise versus the Pound Sterling by a modest +0.3%, the Dollar came off once again against the Japanese Yen where it showed an overall -1.2% drop on the week. This fresh fall came despite BOJ intervention threats and the announcement of additional stimulus and liquidity measures by Japan.

For its part, the Euro was stronger by 1.2% versus the Greenback largely on the back of initial indications of weakness in the U.S. jobs sector combined with the European Union’s plans to limit naked short selling in E.U. stock shares and government debt.

Also contributing to the Euro’s gains were favorable statements from ECB President Trichet who noted that, “Recent economic data for the euro area have been stronger than expected.”

Forex Market Implications

The forex market took the initiative to sell the U.S. Dollar last week after early disappointing employment numbers indicated potential weakness in the U.S. jobs sector that could further threaten the already challenged U.S. economic recovery.

In addition, the Yen still presents a good buying opportunity versus the Greenback in spite of USDJPY being close to 15 year lows. Accordingly, selling USDJPY on a rally would seem to make sense, although traders should watch out for verbal or actual market intervention by the BOJ that could cause a sharp spike to the upside in the rate that would then provide an opportunity to purchase Yen.

Furthermore, the Commodity Dollars may well continue to trade higher along with commodity prices led by the still bullish price of gold. Also, their issuing countries’ more buoyant economic pictures have generally resulted in higher interest rates and asset yields that continue to attract less risk adverse international investors toward carry trades.

Weekly Recap and Outlook for the U.S. Financial Markets and Dollar – 9/07/2010

The U.S. Dollar fell across the board against all the major currencies last week with the exception of the Pound Sterling. The most price action was seen against the commodity dollars with the Aussie, Loonie and Kiwi ending up as the best performers versus the Greenback last week.    Read full report

Weekly Recap and Outlook for EURUSD – 9/07/2010

EURUSD gained ground last week as the Greenback softened versus all of the other major currencies except the Pound Sterling. Last Monday had no notable economic data releases from the EuroZone, but EURUSD still softened as low as the 1.2659 level. Monday also saw the U.S. Core PCE Price Index come out at 0.1% for the month “” in line with market expectations “” although Personal Spending rose by 0.4% for the month, improving slightly versus its preceding 0.0% reading.     Read full report

Weekly Recap and Outlook for GBPUSD – 9/07/2010

GBPUSD consolidated most of last week, and notably failed to benefit much from prevailing U.S. Dollar weakness largely as a result of disappointing U.K. PMI surveys. The rate started out the week on a positive note as it traded up to its high point for the week of 1.5573 during Monday’s session as the United Kingdom observed its Summer Bank Holiday.              Read full report

Weekly Recap and Outlook for AUDUSD – 9/07/2010

Aided by reduced uncertainty about its recent national elections that resulted in a hung parliament, AUDUSD performed the best last week out of all the major currency pairs. The pair’s notable gains also came as risk appetite returned once again to the international markets and as the price of gold again came close to making another all time high. Read full report

Weekly Recap and Outlook for NZDUSD – 9/07/2010

NZDUSD saw volatile trading week last week, initially starting the week out on a soft note after news broke that the New Zealand Trade Balance came out showing a deficit of -186M. This was worse than the anticipated deficit of -28M by a multiple of seven. Furthermore, the former number saw a downward revision from a surplus of +276M to a reduced surplus of just +214M. Last Monday also saw released the NBNZ Business Confidence survey that came out at the 16.4 level, and considerably below the preceding reading seen of 27.9. Read full report

Weekly Recap and Outlook for USDJPY –   9/07/2010

USDJPY lost some ground last week in spite of the emergency Bank of Japan meeting held on August 29th to discuss measures to curb the recent rise of the Japanese Yen. After the meeting, the central bank revealed its new six month loan program that featured increased liquidity and low interest rates. In one notable measure, the Bank of Japan raised the amount of funding that is available to banks from ¥20 trillion to ¥30 trillion. In spite of this additional easing action by the Bank of Japan, USDJPY started off last week by falling sharply.         Read full report

Weekly Recap and Outlook for USDCAD – 9/07/2010

USDCAD came off last week as the Loonie gained due to increased risk appetite in international asset markets, weakness in some U.S. jobs data releases and elevated gold prices approaching all time high levels. The pair started the week off by rallying sharply in response to the Canadian Current Account showing a -11.0B deficit versus the market’s consensus for a -10.2B deficit. This disappointment was compounded further by the former number’s downward revision from -7.8B to -8.5B. Nevertheless, the Canadian RMPI number increased by 1.8%, which was quite a bit better than the 0.3% result the market was expecting.            Read full report

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