Hard Week for Dollar as US Economy Stalls

The US dollar dropped this week against most major currencies as the macroeconomic data was terrible, reducing attractiveness of the currency as a safe asset.

The global economic situation wasn’t very favorable for the dollar. The influence of the European crisis on market sentiments weakened somewhat, higher-yielding assets are again in favor of investors, erasing appeal of safe currencies.

Without the support from outside of the US the dollar could only rely on the new from America. And the news were really. Virtually every sector of the US economy, be it manufacturing of the housing market, performed very bad. Some analysts think that the reasons for the economic slowdown were temporary, like the fuel prices hike last month, and soon we’ll see again evidences of the economic recovery in the US. For now, though, the greenback remains week.

EUR/USD opened at 1.4124, slid during the week to 1.3969, but rebounded and closed at 1.4301. USD/CHF slumped to 0.8489 from 0.8790, while NZD/USD rallied to 81.88 from 0.7933.

USD/CAD closed at 0.9759 near its opening price of 0.9740, following the advance to the weekly high of 0.9815. Canada’s economy is too closely tied to the economy of the US, the nation’s biggest trading partner, to allow its currency to profit from demand for riskier assets.

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