The US dollar suffered heavy losses on ‘Black Monday’, as the effects of the struggling Chinese economy spread to the global economy as fears grew over their weak imports and exports.
As China reacted by cutting their interest rates, this strengthened the US dollar and it gained across the board as investors flocked back to the safe haven currency.
The global events meant that data releases from America had a reduced impact on the US dollar at the beginning of the week. However, Tuesday and Wednesday saw Consumer confidence and durable goods orders released respectively, both showing positive signs and growth. Yesterday saw positive Preliminary Gross Domestic Product (GDP) figures released from the US, showing better than expected growth helping support the US dollar.
However, even with this resurgent strength, the few US Federal Reserve members who spoke this week agreed that the much-discussed possible interest rate rise in September seemed less likely with most market commentators now suggesting a rate hike early next year is more likely.