- US Dollar rises for 5 consecutive days after setting a 3-month low
- The BoJ announcement and FOMC minutes send the dollar higher
A look back at the past week of Forex trading using movements in the US Dollar Index:
US Dollar 1-Hour 17:00 02/16 to 12:00 02/21 EST
The Dow Jones FXCM US Dollar Index briefly touched a new 3-month low at the beginning of this week, before ferociously rebounding and posting five straight days of gains.
Despite the initial Sunday night dip, the dollar index rallied through Monday’s Tokyo and London sessions despite a lack of significant news. The US Dollar lost a bit of Monday’s gains at the beginning of Tokyo session on Monday night, as the RBA minutes talked up the advantages of a sustained lower Australian Dollar.
But the dollar came back over the rest of the Tokyo session between Monday and Tuesday, gaining 80 pips against a weaker Yen on news that the Bank of Japan had decided to extend its lending programs in the February meeting. But some of those dollar gains were erased later on Tuesday, when US Empire State Manufacturing disappointed expectations.
Wednesday’s US Dollar Index trading was fairly quiet until the release of the FOMC minutes in the second half of the NY trading session. The minutes did not diverge from Yellen’s earlier comments that only a significant change in the economic outlook could slow the taper pace, which was hawkish enough to send the index 20 points higher.
The dollar continued to rise in trading between Wednesday and Thursday on a disappointing Chinese HSBC PMI that sent the Aussie lower against the Dollar.
The dollar traded fairly steady through Thursday and Friday, not gaining too much against the Pound on disappointing UK retail sales.
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Charts created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to firstname.lastname@example.org .