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Domestic Fundamentals Hurt Dollar Yet Again

February 27, 2014 at 23:53 by Vladimir Vyun

The US dollar fell today as economic data from the United States was negative yet again. The currency dropped despite the risk-aversion sentiment on the Forex market and signs that the Federal Reserve will continue to reduce monetary stimulus.

Initial jobless claims unexpectedly rose from 334,000 to 348,000 last week. Most analysts thought that unemployment claims would stay unchanged. The data followed yesterday’s positive employment report that helped the dollar to gain.

Fed Chairwomen Janet Yellen spoke today, admitting that unexpectedly poor weather affected the economic performance. She stayed optimistic about the future of the US economy:

My colleagues on the FOMC and I anticipate that economic activity and employment will expand at a moderate pace this year and next, the unemployment rate will continue to decline toward its longer-run sustainable level, and inflation will move back toward 2 percent over coming years.

EUR/USD was up from 1.3684 to 1.3706 as of 23:53 GMT today following the drop to 1.3642. GBP/USD rose from 1.6668 to 1.6689, rebounding from the decline to 1.6615. USD/JPY dropped from 102.35 to 102.09, reaching the low of 101.71 intraday.

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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