- US Dollar sees biggest weekly gains in four months
- Unchanged FOMC language sparks taper speculation
- Euro-zone inflation sends Euro lower
A look back at the past week of Forex trading using movements in the US Dollar Index:
US Dollar 1-Hour 17:00 10/27 to 12:00 11/01 EST
Want to trade with proprietary strategies developed by FXCM? Find out how here.
It was a big week for the Dow Jones FXCM Dollar Index. The US Dollar saw the biggest weekly rise since Bernanke’s taper comments in June of this year.
The first two days of trading saw a steady rise in the US Dollar, despite a lack of news to account for a stronger greenback. A headline about ECB’s Nowotny talking down a future rate cut only temporarily delayed the next dollar rally. It seemed like traders were position for the FOMC rate decision and accompanying comments on Wednesday.
The FOMC did not change its language regarding QE in its October statement. Following a month that included a major government crisis, the unchanged language surprised traders and sent the US Dollar towards 10,500. US Dollar traders may have realized that the government shutdown didn’t delay the next taper as much as originally estimated.
On Thursday, a lower than expected Euro-zone inflation print slowly had an effect on Euro traders, who realized that the ECB may again cut the interest rate despite Nowotny’s comments. The Euro declined against major pairs, including the US Dollar.
Finally, on Friday, the US ISM for manufacturing beat expectations for the month that included the government shutdown, again sending the US Dollar higher on another rise in taper speculation.
New to Forex? Watch this video
Charts created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to firstname.lastname@example.org .
- Australia International News