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Dollar Ends Week Lower, Refuses to Surrender

September 21, 2013 at 19:09 by Vladimir Vyun

Focus on one US dollarThe US dollar closed lower against other most-traded currencies, excluding the Japanese yen, after the most important event of this week (or perhaps even this month) — the Federal Reserve policy meeting.

The Fed shocked the Forex market as it refrained from reduction of its stimulus program. Some market participants were surprised by the reaction as according to various polls about a third of analysts were expecting such decision. Yet most traders were anticipating stimulus reduction for a long time and considered it to be almost guaranteed. Therefore they were unprepared for absence of quantitative easing tampering.

The dollar sharply tumbled after the policy decision, but quickly started to recover, especially after Fed members signaled that QE tampering may occur rather soon. Such comments led to speculations about trimming of asset purchases in October. The greenback was not able to erase losses completely, but significantly trimmed them against most majors.

EUR/USD jumped from 1.3351 to 1.3522 this week. GBP/USD closed at 1.6015, higher than the opening of 1.5934, but significantly lower than the weekly high of 1.6161. USD/JPY managed to rise from 98.68 to 99.32 after sliding to 97.75.

If you have any questions, comments or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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