The Dow Jones FXCM Dollar Index (ticker:ticker::USDOLLAR) fell for 10 consecutive trading days and finished at multi-month lows on a wave of mediocre US economic data and a sharp rally in global equity markets. Can it continue to fall in the week ahead?
The Euro slipped midweek, but was able to finish the week strong versus the US Dollar, just short of $1.3700. Policymakers continue to complain about the threat of deflation even though growth is rebounding.
The British Pound rallied to a fresh yearly high of 1.6722 following the Bank of England (BoE) Inflation Report, and the GBPUSD may press higher next week should the fundamental developments coming out of the U.K. highlight a stronger recovery for 2014.
Given the incredible momentum behind the S&P 500 (as a risk gauge) and persistent tumble from the US Dollar (as a safe haven) this past week, we would assume that the Yen crosses would be hurtling higher on carry appetite.
The Australian Dollar is vulnerable to renewed selling as risk sentiment sours anew after a sharp retracement of the knee-jerk selloff driven by emerging market jitters.
Gold prices surged this week with the precious metal advancing more than 4% to trade at $1319 at the New York close on Friday.
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Written by the DailyFX Research Team. To sign up for a weekly e-mail with our currency outlooks, go to our page for forex news delivered to your inbox.