Currency Note US Dollar

Difficult week for the US dollar

By Smart Currency August 16th, 2013

A mixed week for the US dollar started with gains against a number of its major trading partners, despite no overly upbeat data coming from the US. Positive speculation surrounding retail sales data worked in the US dollar’s favour and was vindicated when the data did reveal better than expected growth. Continued speculation over winding back the bond buying process meant that the US dollar was particularly sensitive to economic data and aided in its early appreciation. However, words from a member of the Federal Open Market Committee (FOMC) dampened moods as he warned against a change of policy based solely on positive economic signs and hampered dollar performance mid-week. Furthermore, disappointing Producer Price Index data prompted further losses for the currency. Moving towards the end of the week, the downward trend was soon reversed as rises from the currency were enjoyed following the news that jobless claims across the pond had fallen to the lowest point since 2007. Even with the warnings from the FOMC member, big positive signs for the economy seem to continue to spur speculation over tapering, especially given the historical weight given to the importance of US employment rates in any decision to taper. A raft of less influential data is still due today, with Building Permits being possibly the most influential, as the US dollar rounds up a topsy turvy week. Get in touch with your trader now to stay on top of continued volatility.