The US dollar remained relatively soft during the past trading week, but there are still plenty of dollar bulls who believe that the currency’s fall is just a correction in a long-term bullish trend.
The greenback was held back by cautiousness ahead of the inauguration of Donald Trump as US President (though the actual event had little impact on markets after it happened). At the same time, solid economic data was supportive to the currency, while the outlook for monetary tightening from the Federal Reserve helped dollar bulls to maintain optimism. For the time being, though, markets will likely concentrate their attention on first decisions of Trump as a president, which should give insight into his priorities and plans.
The weakest currency this week was the Canadian dollar, which dropped after the Bank of Canada had decided to keep its monetary policy without change. The European Central Bank also held a policy meeting, and it also hurt its respective currency, though the euro (unlike the loonie) managed to outperform the greenback.
EUR/USD rose from 1.0695 to 1.0698, demonstrating the fifth weekly advance in a row. GBP/USD gained as much as 3.1% from 1.1998 to 1.2370, basically erasing the losses of the two previous weeks. Meanwhile, USD/CAD advanced from 1.3133 to 1.3312.
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