The Dow Jones FXCM Dollar Index (ticker = USDollar) dropped 1.2 percent this past week – the sixth drop in seven weeks.
The Euro failed to capitalize on bolstered risk flows thanks to a medium-term resolution to the US fiscal deadlock, although it did manage to make significant progress towards its yearly highs ($1.3710 on February 1) against the US Dollar by the end of the week ($1.3704 on October 18).
The British Pound surged versus the downtrodden US Dollar and yet finished just short of year-to-date peaks.
The Japanese Yen regained its footing against the dollar, with the USDJPY slipping back below the 98.00 handle, and the pair may continue to give back the rebound from earlier this month as it carves a lower high just below the 99.00 region.
Gold prices rallied 3.24% this week with the precious metal trading at $1313 ahead of the New York close on Friday. The advance comes amid a rally in broader equity markets with the S&P making fresh record highs while a substantial sell-off in the greenback was further exacerbated as the government shut-down pushed out expectations for a Fed tapper this year. Subsequently, gold rebounded off key support at $1268 with the rally breaching a medium-term technical formation.
We’ve argued in favor of a significant Australian Dollar recovery since early August.
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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.