Dollar closes week lower speculating Fed rates pause
By Marc Spaelti - ACM Senior Trader
Yesterdays News and Events:
The dollar weakened across the board on Friday, especially against Jpy, as speculation grew that the Fed may paused its rate-raising run after 17 straight rises. After hitting three months highs against the Eur and the Jpy, the dollar slid last week after Mr. Bernanke Fed Chairman said inflation would likely ease in coming quarters as economic growth slows. His comments make Forex market players believe that Fed will not hike rates at its next policy meeting on the 8th of August. The Yen rallied across the board and extended its gains late Friday after China announced it was raising its bank reserve requirements by 0.5% to call its racing economy. Jpy is the Yuan currency proxy investors like buy to play Yuan strength. Also this morning, Boj deputy governor Muto said that further interest rate rises (JPY) will be gradual and it was desirable to reduce volatility of long-term yields by reducing uncertainty over monetary policy. Last week Eurusd traded down to 1.2449 and recovers up to 1.2708. Usdjpy went up 117.89 and returned end week 115.83 lowest.
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