No End to Dollar’s Gains? It Looks So for Third Week
The US dollar showed no signs that it is going to stop its rally, demonstrating solid gains for the third consecutive week. Speculations about tighter monetary policy continue to help the currency in the environment of widespread monetary accommodation.
The major event this week was the release of US non-farm payrolls. They came out much better than expected, reinforcing the opinion that the Federal Reserve may tamper back its monetary stimulus this year, perhaps in September.
Other central banks’ bias towards monetary easing also helped the greenback. The European Central Bank and the Reserve Bank of Australia not only kept their interest rates low, but also signaled that even more accommodative policy is possible.
Mark Carney led his first meeting as the Bank of England Governor. He kept monetary policy extremely accommodative too. On top of that, he issued a strong statement, suggesting that no reduction of monetary stimulus should be expected in the foreseeable future.
EUR/USD slumped from 1.3010 to 1.2829 this week, reaching the lowest weekly close since May. GBP/USD tumbled from 1.5199 to 1.4898, such low weekly close was not seen since 2010. AUD/USD slid from 0.9110 to 0.9058 (also the lowest in three years) after rallying to 0.9251.
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Earlier News About the US Dollar:
- Non-Farm Payrolls Bring Dollar Higher (2013-07-05)
- Dollar Gains During Holiday (2013-07-04)
- Short-Covering Drives Dollar Lower, Fundamentals Remain Positive (2013-07-04)
- Dollar Traders Near Highest in Month amid Hopes for Employment Growth (2013-07-03)
- US Dollar a Little Weaker on Risk Appetite (2013-07-01)