US Dollar Ends Confusing Week Mixed

The past trading week was rather confusing, with many currencies moving in unexpected directions. For example, the Japanese yen and the Swiss franc are both considered to be safe currencies and thus usually move in the same direction. But this week, the Japanese yen ended trading as the strongest currency on the Forex market, while the Swiss franc was the weakest one. The US dollar was not an exception, moving unpredictably after the FOMC monetary policy announcement.
The Federal Open Market Committee held a monetary policy meeting this week and released a rather dovish statement after the conclusion of the gathering. But instead of falling, the dollar was broadly stronger. Market analysts speculated that it is because traders were anticipating an even more dovish statement, perhaps even a hint at additional monetary easing. Instead, the FOMC signaled that it is planning to keep the current policy until at least 2023. Yet the rally of the greenback was very short-lived, and the currency retreated by the week’s end.
The Great Britain pound reacted poorly to signs that the Bank of England is considering implementing negative interest rates. But the sterling rallied later on positive macroeconomic data and hopes for a Brexit deal, ending the week rather strong.
The Bank of Japan maintained its extremely accommodative monetary policy, but the yen did not particularly care about that. Instead, the currency rallied as the political uncertainty around the successor to the previous Prime Minister Shinzo Abe cleared, and the new Prime Minister Yoshihide Suga signaled that he is going to maintain the so-called Abenomics policy.
The Canadian dollar was also behaving unusually, not following the rally of crude oil prices, even though the currency and the commodity usually move in tandem. Instead, it looks like the loonie reacted more to negative domestic macro reports, which dragged the currency down.
EUR/USD ended the week almost flat at 1.1841. GBP/USD rallied from 1.2781 to 1.2922, reaching the weekly high of 1.3007. USD/CAD edged up from 1.3181 to 1.3202. USD/JPY sank from 106.10 to 104.56, while USD/CHF edged up from 0.9088 to 0.9112.
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Original from: www.earnforex.com