The US dollar was mostly soft against other major currencies this week as macroeconomic data supported the positive mood of Forex traders. The euro was an exception, falling against the greenback on weak fundamentals.
US fundamentals were mixed, but USD was weakened by the end of the week by slower-than-expected GDP growth (which was not bad by itself though). Britain’s growth was much slower, but was viewed on more positive light by market participants as the country was in recession previously, boosting GBP. JPY and NZD were supported by absence of additional stimulus from Japan’s and New Zealand’s central banks. As for EUR, economic data and worries about the coming European Central Bank meeting drove the currency down.
The major events next week are the meeting of the Federal Reserve and the ECB. No changes to policies are expected, but surprises can happen and statements by the central banks’ heads may strongly impact the FX market.
EUR/USD declined from 1.3076 to 1.3032 this week and its weekly low was at 1.2954. GBP/USD went up from 1.5230 to 1.5484, the highest weekly close since February, and NZD/USD climbed from 0.8398 to 0.8472, while the weekly high was at 0.8561. USD/JPY dropped from 99.80 to 98.08.
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