The US dollar remained well supported on Friday, with the currency continuing to catch bids in light of the Federal Reserve’s recent hawkish shift.
USD has recovered losses after the US dollar suffered a sharp selloff last week in the wake of the Federal Reserve’s latest policy statement.
The Fed kept interest rates on hold, and struck a notably dovish tone in its forward guidance despite acknowledging recent US economic data has shown a significant improvement.
USD investors were particularly dismayed by comments from Fed Chair Jerome Powell as he stressed that the US economy still has a ‘long way to go’, and suggested that ‘transitory factors’ are behind the recent jump in inflation.
However, the US dollar clawed back some of its losses in the latter half of the week, as USD investors welcomed the latest US GDP release after preliminary figures reported larger-than-expected expansion of growth in the first quarter.
This recovery then accelerated at the very end of the session as weakening market sentiment on the back of some underwhelming Chinese data, as well as a surge in US personal spending in March, bolstered the appeal of the ‘Greenback’.
Turning to the remainder of the session, the primary focus for USD investors will be last month’s payrolls report on Friday.
This could see the US dollar close the week on a high as economists forecast that the US economy will have added almost 1 million new jobs in April.
However, any upside in the safe-haven US dollar could still be tempered this week if we see any improvement in market sentiment.
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)