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Weekly roundup: US dollar stumbles in upbeat trade

currency-newsWeekly roundup: US dollar stumbles in upbeat trade
The US dollar trended broadly lower last week, initially softening through the first half of the session as a risk-on mood prevailed.

This upbeat mood was partly attributed to the publication of the latest ISM non-manufacturing PMI, which reported stronger-than-expected growth in the US service sector.

The US dollar then began to rebound in mid-week trade as concerns the US could default on its national debt rippled through the market, with investors spooked by the potential impact this could have on the global recovery.

However the ‘greenback’ was quick to relinquish these gains, following Congress’ vote to extend the debt ceiling deadline until December.

USD exchange rates weakened again at the end of the week, after the latest US non-farm payrolls printed well below expectations, with the US economy only adding 194,000 jobs in September, against forecasts for a more robust 500,000.

Whilst the US dollar was able to recoup some of its losses after an initial knee-jerk slump, the ‘greenback’ still closed the week on a low as the dire payroll reading appeared to raise doubts whether it will announce its tapering plan in November.

Turning to this week’s session, the spotlight will undoubtedly be on the release of the US consumer price index on Wednesday.

Whilst the Fed is mainly focused on the labour market, another strong inflation reading may help to bolster confidence that the Fed will push forward with its tapering plans, and help to lift the US dollar on Wednesday.

Also on this week’s data calendar will be the latest US retail sales report, which could place some pressure on the US dollar on Friday as an expected slump in sales growth in September is likely to raise concerns over consumer spending.
Philip McHugh

Philip McHugh

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)

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