Graphic Rewind: Five Straight Days of Losses Leaves USD at a Three-Week Low
- Changes in tone at the RBA and ECB send respective currencies higher against the dollar
- Weak NFP’s and ISM Manufacturing dragged the greenback lower
A look back at the past week of Forex trading using movements in the US Dollar Index:
US Dollar 1-Hour 17:00 02/02 to 12:00 02/07 EST
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The Dow Jones FXCM US Dollar Index has declined for five consecutive days and set a new 3-week low, following a week of disappointing data and a turn in tone from the ECB and the RBA.
Monday’s trading hadn’t deviated too far from the weekly open until the release of the ISM for manufacturing at the start of the NY session. The activity index reported the lowest result in 8 months, and USD/JPY fell 45 pips following the release.
In overnight trading between Monday and Tuesday, the RBA announced unchanged interest rates following their February meeting. The RBA’s guidance was less-dovish than many traders expected, leading to Aussie gaining 100 pips against the US Dollar.
After two straight days of decline on Monday and Tuesday, Wednesday’s trading was fairly quiet with a mix of medium impact news, but the dollar index still declined slightly and kept the losing streak going.
On Thursday, the US Dollar took two hits over the day’s trading. The dollar index first declined against the Aussie following a surprise Australian trade surplus. Then, the Euro rose over 100 pips against the US Dollar, as ECB President Draghi displayed a patient tone about taking further monetary action to fight weak inflation.
Finally, on Friday, the US Dollar declined on a release of a disappointing change in non-farm payrolls. The greenback lost the most against the Euro and the Pound, which are both still trading near daily highs against the dollar at the time of this writing.
Charts created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to firstname.lastname@example.org .
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.