Weekly Movement of U.S. Dollar

The U.S. dollar posted gains against the Great Britain pound and the Japanese yen this week, on the other hand, the greenback fell versus the euro, extending its losses for the second week.

The speculations that the economic recovery gains momentum and the statement of 
Jean-Claude Trichet, that the European economy fares better than most market participant think, bolstered the euro against the dollar, despite some losses in the beginning and the end of the week. The week was rather flat for the GBP/USD currency pair, but Friday pushed the pound significantly lower, perhaps because of the unfavorable macroeconomic indicators, including the widening trade deficit. Yet this decline may be just a correction after the five-week rally of the U.K. currency. The improving outlook for the global economy diminished the demand for the safety, dragging the yen down in the second half of this week.

The U.S. labor market provided unexpected support to the greenback, showing the surprisingly good numbers. Yet the U.S. economy for the most part doesn’t show many reasons for the optimism and the strength of the dollar remains questionable.

EUR/USD closed at 1.2639 after opening at 1.2555 and reaching its weekly high of 1.2721. GBP/USD closed at 1.5063 after it opened at 1.5192. USD/JPY closed at 88.63 after it opened at 87.71 and reached as low as 87.01 this week.

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