The dollar showed amazing performance last week, gaining against other most-traded currencies. Will it be able to extend the rally or is a sharp correction incoming?
The Federal Reserve and its Chairman Ben Bernanke spoke and the comments led to the huge rally for the dollar. Some kind of correction after such big move in one direction could be expected and, indeed, the dollar gave away part of its gains today. Yet this is not a reason to turn bearish on the greenback. The market sentiment remains depressed and it is positive for the greenback.
Monday was quiet in terms of economic reports from the United States, but the rest of the week will be busy with news. Among particularly important reports are housing data, consumer confidence and GDP figure. Some indicators are expected to be little worse than they were before, but for the most part data should support the opinion that the US economy is healthy and can survive without excessive stimulus.
Traders will also listen closely to speeches of Fed members, trying to get clearer understanding of the central bank’s plans.
Analysts, including DailyFX and Forex Crunch, were bullish on the dollar.
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