Dollar Pares Gains After Opening Sharply Higher

The US dollar declined today against its most-traded peers, yet it is important to understand that the currency opened sharply higher, meaning that it still trades above the last week’s closing rate against most majors.

The hawkish Federal Reserve minutes as well as the relatively balanced stance of Chairperson Janet Yellen allowed the dollar to surge. While the currency lost its gains versus the Great Britain pound, returning to the Friday’s closing level, it still trades above the Friday’s close versus the Japanese yen and near the highest rate since September against the euro.

The greenback will likely maintain its bullish bias unless this week’s economic data spoils the optimistic outlooks for the economy of the United States. Truth be told, today’s reports were not particularly helpful as the Markit Flash Services Purchasing Managers’ Index fell more than was expected and the new home sales trailed forecasts. Yet there are still plenty reports to be released later this week, and they may reinvigorate optimism for US economic growth.

EUR/USD traded at about 1.3191 as of 21:45 GMT today after closing at 1.3243 on Friday and opening at 1.3194 today. GBP/USD traded not far from the the Friday’s close of 1.6573 after opening at 1.6547. USD/JPY declined from 104.26 to 104.04.

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