No markets move in a straight line, and the Dow Jones FXCM Dollar Index (ticker: USDollar) fell for the first week in eight as its winning streak inevitably came to an end.
The Euro was the second worst performing major this past week, adding a mere +0.54% against the exceptionally weak US Dollar, although the Euro’s weakness should not be overstated; it only depreciated by -1.14% against the top Australian Dollar.
Having dropped nearly 2,000 pips and 25 percent, the Japanese yen has finally seen one of its key fundamental milestones met: a change in leadership at the Bank of Japan (BoJ) that is focused on significantly leveraging stimulus.
The British Pound snapped back from a fresh yearly low of 1.4830 and the GBPUSD remains poised to track higher in the coming days should the Bank of England (BoE) talk down speculation for more quantitative easing.
Our expectations noted in last week’s forecast have come to fruition with gold mounting the $1585 resistance level early in the week, taking bullion prices up by 0.86% to close at $1592 in New York on Friday.
The Australian Dollar looks set to continue higher as a dovish FOMC bolsters its yield appeal but RBA meeting minutes present a possible roadblock.
The New Zealand Dollar fell sharply on Thursday as the Reserve Bank of New Zealand decided to hold its benchmark rate unchanged at a record low 2.5 percent for a 16th straight meeting. Warnings over a potential rate cut on an overvalued currency intensified the sell-off.
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