The US dollar posted weekly losses against other most-traded currencies as the end to the US budget stalemate resulted in the overwhelmingly positive market sentiment even as the relief is temporary and the crisis was just postponed.
The major theme of the week remained the US government shutdown. A deal was not reached over the weekend and traders were becoming nervous. Currencies moved largely sideways amid uncertainty, but surged against the greenback after an agreement was reached after all even though it was just a delay till the next year. The dollar was also hurt by rating agencies and speculations that the Federal Reserve will not be able to taper its monetary stimulus this year.
The shutdown created a backlog of economic reports that were not released. Next week will be pretty busy as government agencies reopened and data will start flowing into markets again.
EUR/USD jumped from 1.3558 to 1.3683 after falling to 1.3473 during the week. GBP/USD soared from to 1.5968 to 1.6164. USD/JPY went up from 98.23 to the weekly high of 98.99, but retreated and closed at 97.84 by the weekend.
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