Last Thursday the EUR/USD rallied to 1.1186 but subsequently erased some of its gains and ended the day’s trading along with a 0.4% increase to 1.10815.
On Friday, the dollar posted even lower lows and only edged back up this Monday to 1.1176 versus the euro and also increased 0.2% versus the British pound to 1.3251.
This is what’s been going on for the dollar:
The Federal Reserve on Thursday decided not to increase interest rates which put tension on the dollar and gave a boost to Gold prices which saw a 3-week high reaching $1,355
However, on Friday, June’s NFP data release saw an increase of 287,000 brand-new jobs which was significantly stronger than May’s 11,000
Other data on Friday also showed a strengthening of household spending. This was all good news for the Greenback.
Until we had the release of the GDP report later that day which came in weaker than expected. It showed a mere 1.2 % increase for the 2nd quarter of this year when analysts were hoping for a 2.6% increase. And predictably the dollar retraced some of its gains.
What is next:
The Fed’s overall tone through its statement can be seen as preparing the markets for a poten-tial rate increase when the FOMC meets again in 20 September.
But they did not provide any assurances of that happening because a lot could take place be-tween now and the next meeting, including unexpected economic indicators, geopolitical de-velopments or any other events that can shake the state of the local and/or global economy.
Investors for this week will be focusing on the Bank of England’s decision coming up on Thursday