This week had a significant impact on the Forex market as the US government experienced a partial shutdown. The US dollar was falling because of this event, which overshadowed other news. Yet by the weekend the currency made a huge thrust to the upwards, trimming losses against some majors and even gaining against others.
Many market participants were hoping that US politicians would come to a last-minute agreement before the deadline to avoid a shutdown. Such hopes were futile and the dollar has started to move down, losing its credibility as a safe currency. Yet the greenback bounced sharply by the end of the week. It was a surprise as non-farm payrolls, which were expected to bolster the US currency, were delayed due to closure of government services.
Whatever the case, the rally allowed the dollar to trim losses versus the euro and the yen. Moreover, the currency managed to gain on the sterling, which was very strong previously, but has started to experience weakness by the weekend.
EUR/USD advanced from 1.3488 to 1.3552 this week, but retreated from the weekly high of 1.3645. USD/JPY was down a little from 97.62 to 97.44. GBP/USD rallied from 1.6139 to 1.6259 over the week, but slumped to 1.6018 by the weekend.
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