The US dollar experienced some significant volatility last week, recording a decline, and lost its early gains after Donald Trump’s speech in response to a statement by the Fed Chairman.<\/p>\n
The USD saw a relatively weak start to last week\u2019s trading session, after the currency was hit by a profit-taking wave after a strong performance in the previous week.<\/p>\n
However, the US dollar recovered these losses quickly, and then it recovered during the middle of last week. This came as Federal Reserve Chairman Jerome Powell testified before the US Congress, which included giving a bullish assessment of the US economy, while noting that the Fed’s gradual tightening path needs to continue for some time.<\/p>\n
However, the US dollar started falling again near the end of the session, after Trump\u2019s speech in which Powell was targeted, claiming that the Federal Reserve will undermine the recent growth in the US economy as it continues to strengthen the US dollar through tightening monetary policy. This was not all that led to increased losses in the US dollar, but Trump also criticized China and the EU, raising fears of a currency war.<\/p>\n
Regarding data, the start of the week seems to be somewhat positive for the USD, as some market participants believe that the expected rise in US GDP figures will strengthen the currency over the weekend. But as US investors remain wary of the consequences of Trump\u2019s recent speech, these gains remain far from guaranteed.<\/p>\n
The euro, meanwhile, is still trying to create momentum as falling data highlights the weakness of trading in the single currency. The euro was fairly calm last week as the latest trade balance numbers in the Eurozone failed to get a big response from investors as the trade surplus narrowed slightly in May.<\/p>\n
The latest CPI figures in the Eurozone caused only a minimal response to the euro’s mid-week exchange rate, although core inflation fell below expectations. Even the sudden rise in the euro in the second half of the week had nothing to do with the underlying factors behind the currency, but was driven by a decline in the US dollar.<\/p>\n
This week, however, the euro is likely to witness gains thanks to important some economic data, most notably the Eurozone PMI data.<\/p>\n
Finally, investors are waiting for the ECB’s recent monetary policy meeting, which will lead to the biggest shift in the euro exchange rate, but considering the growing trade tensions, the bank’s direction may become increasingly pessimistic.<\/p>\n","protected":false},"excerpt":{"rendered":"
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