Dollar’s Bearish Trend Persists amid Negative Fundamentals

The US dollar was among the weakest currencies during the past trading week due to a range of bearish factors that made the greenback unappealing to investors.

The Federal Reserve issued a dovish policy statement that made experts think that the Fed will push back the next interest rate hike. Growth of US gross domestic product in the second quarter of this year disappointed market participants even though it was not bad by itself and accelerated sharply from the first three months of the year. Political turmoil in Washington continued and added to doubts that Trump’s administration will be able to implement reforms promised by the President in his election campaign. The International Monetary Fund added to concerns, revising growth outlook for the United States down.

The only major currency that turned out to be even weaker than the greenback was the Swiss franc. The positive outlook for the eurozone resulted in the inflow of funds into higher-yielding European assets and very limited interest in protection provided by the Swissie.

EUR/USD rallied from 1.1662 to 1.1749 — the strongest weekly close since January 2015. GBP/USD edged up from 1.2989 to 1.3133. USD/JPY slipped from 111.10 to 110.69 after touching the weekly high of 112.18. USD/CHF jumped 2.5% from 0.9449 to 0.9684.

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