Dollar Rallies to Weekly Gain, Rally Comes to Halt

This week was rather volatile and unpredictable for the US dollar. While it started favorably for the greenback, the currency’s rally came to halt by the end of the week due to some disappointing economic releases, most importantly worse-than-expected economic data.

The dollar started the week on a strong footing as the theme of risk aversion dominated the Forex market and traders were speculating that positive economic data from the United States should encourage the Federal Reserve sooner. Indeed, the first major report showed that the US economy expanded last quarter and the rate of expansion was faster than it has been anticipated. Yet the greenback lost some of its bullishness as the Fed released a statement after the monetary policy meeting, and statement was not as hawkish as was anticipated. But what really ruined the US currency’s performance were non-farm payrolls that missed forecasts.

Despite the similarity of dollar’s moves against different currencies, the outcome was rather different for various currency pairs. The euro closed the week virtually flat, while the yen outperformed the currency. Meanwhile, the sterling was dragged down by .

EUR/USD dropped from 1.3428 to 1.3367 before rebounding and closing the week at 1.3427. GBP/USD sank from 1.6884 to 1.6818. USD/JPY fell from 102.78 to 102.59.

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