Fundamentals are Bad for US Dollar, But Week Wasn’t Bad

The fundamentals this week were negative for the US dollar, weakening the currency against some major counterparts, but performance of the greenback wasn’t that bad, considering all the pressure to the downside.

There were plenty of bad new for the dollar this week. Bad housing data, rising unemployment claims and slower that expected growth of the US economy. The week ended with the speech of Ben Bernanke, who hinted at possibility of additional stimulus without detailing an actual plan.

The dollar was dragged down by the unfavorable fundamentals and fell against the euro and commodity currencies (including the currencies of Canada, Australia and New Zealand). On the other hand, the dollar gained against the franc and rallied versus the yen before losing its gains by the end of the week as there aren’t many choices for investors who need a safe currency, but afraid of interventions of Japan and Switzerland. The pound also fell against the greenback as Britain has its own problems that erase attractiveness of the nation’s currency.

Next week may also be hard for the dollar. Analysts predict another unfavorable report about hosing and are pessimistic about employment data.

EUR/USD climbed from 1.4376 to 1.4498, while during the week it dropped to 1.4327. USD/CHF climbed from 0.7904 to 0.8058 and reached the daily high of 0.8157. AUD/USD surged from 1.0380 to 1.0569.

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