Dollar Falls This Week as Concerns for US Economy Return

The gains of the US dollar at the beginning of this week were outweighed by the losses in the second half as the poor employment data raised the concerns for the US economy and damped the demand for the US currency.

At the start of the week the dollar was still supported by the demand for the safe haven, caused by the troubles in Europe and the Korean conflict. Later the greenback was weakened as the demand for the safety was diminished by the hopes that the meeting of the European Central Bank’s policy makers would provide some solution to the Eurozone sovereign-debt crisis. The meeting hasn’t provided the much-needed solution and this could have helped the dollar. But the increasing unemployment and the slow growth of the employment in the US caused the market participants to shun the US currency.

The bad employment data revived the old question: is the quantitative easing good for the economy? Some analysts argue that it can help and point out that so far it hasn’t debased the dollar, as was predicted. But most traders and economists believe that the unending printing of the money can bring nothing but ruin to the economy. And the recent rally of the greenback was caused only by the weakness of other currencies, not by good shape of the US economy itself, according to their opinion.

EUR/USD rose from 1.3280 to 1.3411 after tumbling as low as 1.2969. GBP/USD jumped from 1.5999 to 1.5771, following the drop to the weekly low of 1.5484. USD/JPY went down from 83.81 to 82.71.

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