US Dollar Declined This Week on Poor Macroeconomic Reports

This week was rather bad for the US currency even as the US economy demonstrated a moderate growth, which nevertheless wasn’t as good as the economists anticipated.

The economic reports were for the most part worse than the forecasts promised, even though the data showed growth. One example of such reports was the report about the gross domestic product. Even as GDP expanded 3.2 percent in the fourth quarter of 2010, compared to the 2.6 percent growth in the third quarter, the increase still was below the expected 3.5 percent growth.

Euro Rises for 4th Day on German Business Confidence Data

The euro rose to its eight-week high level against the US dollar today as the German Business Climate data surpassed forecasts, showing confidence in the strength of the Eurozone’s leading economy.

The euro also rose for the fourth consecutive day against the British pound and for the second one against the Japanese yen. German Ifo Institute released its Business Climate index data for January, showing a growth from 109.9 to 110.3, while the major economists forecasted that the index will remain unchanged this month.

CAD Drops Following BoC Decision to Leave Rate at 1 percent

The Bank of Canada left the overnight interest unchanged and stated its opinion on the possibility of future rate hikes, sending the Canadian dollar straight south against all other major currencies today.

The loonie declined even against the US dollar, which is experiencing a rather bad day as of now. The CAD has been bullish before the rate decision was released by the BoC. While the market participants expected that the overnight rate target will be maintained unchanged at 1%, the reaction to the Bank’s statement was very negative for the Canadian currency. The statement suggested that the next rate increases won’t be happening very soon:

US Dollar Rallied This Week, Stalled on Poor Employment Reports

This week was very positive for the US dollar as the US economy showed the signs of the sustainable growth, but the end of the week spoiled the positive sentiment to some degree as the labor market wasn’t as strong as was expected.