The US dollar struggled at the start of the week, as caution and negativity surrounded the currency. After recent hopes of an interest rate rise happening sooner rather than later, the latest sentiment has dampened these hopes and pushed back the expected timelines of such an event occurring. This was echoed by Richard Fisher, a member of the Federal Open Market Committee, who warned they should remain sensible. With this in mind, the dollar lost ground against higher higher-yielding partners such as the Australian and New Zealand dollars. Some data helped to curb the negative sentiment with the existing home sales coming ahead of expectations. It was the inflation figure that was the most influential, and an unexpected rise of 0.1% allowed the dollar to strengthen against the majority of its partners.
The positive signs continued yesterday, although results were mixed. The weekly Unemployment Claims came in worse than expected, but was negated by the fact that the four-week average variant was the lowest in fourteen years. This prompted a sixth consecutive daily increase against the Japanese yen, although the dollar remained little changed against sterling over the day. Today closes out the week with one final release, which will come in the form of new home sales data. Investors will look to this for some final encouragement at the end of a mixed week.