Dollar Declines against Euro before Fed

The U.S. dollar declined today against the euro, extending its weekly drop, as the chances for the Federal Reserve to increase the interest rates next week became more slim.

The dollar also headed for a weekly loss against the Japanese yen as the weak macroeconomic statistics from the United States made traders believe that the FOMC will leave rates unchanged at its meeting on June 25.

While there is a great probability that the U.S. interest rate will remain at 2 percent until Fall at least, European Central Bank will probably signal that it will be raising the interest rates soon, as the inflation in Eurozone comes out above the central bank’s target level.

Today EUR/USD rose from 1.5500 to 1.5567 as of 9:00 GMT; the weekly gain for this currency pair is 1 percent so far. USD/JPY is down insignificantly today — from 107.94 to 107.87; the weekly drop is just 19 pips.

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