On Friday, Greenbacks gained value against its counterparts after the positive sales data was released. Retail Sales data indicated the strength of United States economy and also restored the confidence of the investors in the United States economy.
Janet Yellen, Chair of the Board of Governors, Federal Reserve System said on Wednesday in front of congressional committee that they might consider going back from its plan to increase interest rates by a total one percent in 2016. Moreover, before the meeting started she said that the United States economy is doing well, and it will continue to stay on a path of moderate growth rate. This will further allow the FED to make gradual adjustments in the monetary policy. However, she also acknowledged the risks associated with tightening financial policy that could have a negative impact and result in stock sell off.
Furthermore, Greenbacks gained almost 0.63% against the Japanese Yen after going through a 15 month low to trade at 113.95. Japan’s economic data that was released earlier also showed that the economy had contracted by 0.4% in the last three months. Japanese shares also soared as yen weakened against dollar.
On the other hand, Euro lost 0.44% against the dollar last week to trade at 1.1205. The single currency gained value by almost 0.16% against the Japanese yen, with EUR/JYP at 1.1375. Dollar gained against the Swiss Franc last week, with USD/CHF to trade at 0.9769. US dollar edged almost 0.47% as compared to the Swiss Franc.
Sterling pound compared to the Greenbacks remained steady and the pair traded at 1.4473. As US economy is seen on path of recovery but, World Bank forecasted that the United States GDP growth rate will be at 2.8% in 2016 instead of 3% GDP growth rate, whereas leaving the GDP growth rate of United Kingdom and EU were intact.
Elsewhere, Australian and New Zealand dollar also lost its ground against the US dollar. The Australian Dollar lost almost 0.44% to trade at 0.7076, while NZD/USD pair traded at 0.6619. Chinese trade data that was released earlier also showed that the second largest economy in the world had gone through a rough start in 2016 and its imports and exports had fallen beyond expectations. China’s exports fell by 11.2% and imports fell by 18.8%. US dollar counterpart that is the Canadian dollar also lost value by 0.14%. USD/CAD traded at 1.395.
US dollar Index which measures the collective strength of the Greenbacks against six major currency pair was at 96.37 and it went up by 0.40%. Moreover, the demand for the dollar was underpinned after the retail sales data was released and FED is likely to stay on tightening the monetary policy.
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