It is very hard to tell anything about the US Dollar at this moment. Since getting hit with the FOMC statement, the USD has been slowly recovering its wounds. While USD/JPY touched the 99.50 level, GBP/USD went back near the 1.6100 level. The Dollar bears are determined to move past the FOMC events and emphasize more on the recent positive reports. Yesterday’s existing home report came better than expected at 5.48M. The index of Phily Fed manufacturing provided a huge condolence too.
The Euro grabbed another winning day against its counterparts. However, these events were mostly due to the comparative weakness of the other currencies. While EUR/USD gained only 19 pips, EUR/GBP managed to get 55 pips and most surprisingly, the EUR/JPY pocketed 202 pips. As there was not any economic report for the Euro, it continued its strong dominance over the others. The German Bundesbank President’s speech and the consumer confidence report of the Euro zone also contributed in this scenario.
It needed only a bad event to make Pound pay back some of the pips it earned during the last few weeks. EUR/GBP gained 55 pips and GBP/USD lost 823 pips in a day. At 0.9 percent, the retails sales number of Britain came out worse than expected. This decline in the rate is the fastest of last ten months. The public sector borrowing report only made things worse. The imminent future does not look good for GBP. Any trade involving this currency should be done with utmost caution.