The US dollar turned overwhelmingly bearish throughout yesterday’s trading session, following the Fed announcement that US interest rates would remain at their current levels for at least the next two years. The greenback took further losses after the weekly US Unemployment Claims came in higher than forecasted. The news brought the EUR/USD to a five-week high, while the USD/JPY reversed gains made earlier in the week and tumbled close to 80 pips.
As we close out the week, analysts are forecasting the USD to maintain its current bearish trend. The surprising decision from the Fed caused investors to question the pace of the US economic recovery. This sentiment was reinforced by several economic indicators out of the US yesterday that came in below expectations. Traders will want to note the results of the Advance GDP figure today, scheduled to be released at 13:30 GMT. A positive number may give the dollar a temporary boost before markets close.
Traders will not want to forget that next week the US will release its monthly Non-Farm Payrolls (NFP) figure. The NFP is widely considered the leading economic indicator on the forex calendar and consistently leads to market volatility. Should the NFP show further growth in the US employment sector, riskier currencies like the euro may see upward movement.
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Dan Eduard is a Market Strategist with ForexYard. His addition to the ForexYard team has brought a unique new perspective to our clients. Dan's ability to compare and contrast trans-national issues with events in the market is uncanny and many clients so far have used his advice to make leaps and bounds in their trading strategies. He has been published on the ForexYard Trading Blog and affiliate websites. He carries a BA in Political Science and an MA in History.
