USD Should not be underestimated

It seems the US Dollar has got some strength left. Despite the housing figures were not impressive for USA, the USD still managed to dominate the market. Performance tracker of USD, the US Dollar index, rose to 81.61 from 81.90. However, this wasn’t totally unexpected. The home sales report was better than the previous month. With the jobless claim report and Q2 preliminary GDP figure due this week, we can expect a bit more from the Greenback.

That means a retreat for the EUR/USD buyers. The mode is reflected on the market too. While the pair started at 1.3391 at the beginning of the New York session, it came to 1.3341 by the end of the session. Weak performance of the Euro is of significant influence here. The German consumer confidence came in weaker than expected and worse than the previous month. The pair can move above 1.3400 if Germany can provide any positive news. As the unemployment change report of the country is due today, you shouldn’t take any chances.

The strong performance of US dollar coupled with already bleeding British Pound, have affected all the pairs including GBP. While GBP/USD went to 1.5430, GBP/JPY was hesitating around 151.00. Though British sales index was increased, it did not have any positive impact on the market as risk aversion was still high. My broker, 2nd Skies Forex has informed me that there are no major events for the pound this week, which means its corresponding pairs will depend on the market sentiment.