FOREX: weekly review

The dollar hit a 15-month low this week as the prospect that US interest rates would stay at ultra-low levels weighed on the currency.

This was put sharply into focus on Thursday after the European Central Bank delivered its first interest rate rise since the start of the financial crisis in an attempt to fight inflation.

The central bank lifted its main lending rate by 25 basis points to 1.25 per cent, while Jean-Claude Trichet, ECB president, signalled more tightening to come.

Over the week, the dollar index, which tracks the US unit’s progress against a basket of six leading currencies, fell 1 per cent to 75.070, its weakest level since December 2009.

The dollar also dropped to 15-month lows against the euro and the pound, falling 1.5 per cent to $1.4437 and 1.8 per cent to $1.6393 respectively on the week. It also fell 1.4 per cent to SFr0.9110 against the Swiss franc over the week.

Analysts said the prospect of an extended period of easy monetary policy in the US – combined with rising investor optimism – was encouraging investors to use the dollar to fund carry trades, in which the purchase of riskier, higher-yielding assets is financed by selling low-yielding currencies.

Derek Halpenny at Bank of Tokyo-Mitsubishi UFJ said the yen was also the other clear carry trade funding currency given that Japan was likely to keep rates lower for longer than even the US as it battled deflation and the aftermath of last month’s earthquake.

Indeed, the yen dropped 1.3 per cent to a six-month low of Y85.10 against the dollar over the week and lost 2.8 per cent to an 11-month trough of Y122.86 against the euro.

Meanwhile, the Australian dollar which, given its relatively high yield is a favourite target for carry trade investors, rose 1.4 per cent to a fresh 29-year high of $1.0531 against the US dollar on the week and climbed 2.8 per cent to a 2½-year high of Y89.65 against the yen.

Latest news

26.04.2024

Silver price today: Silver rises, according to FXStreet data

26.04.2024

India Gold price today: Gold gains, according to MCX data

26.04.2024

GBP/JPY extends winning spell to 196.00 after BoJ keeps interest rates unchanged

26.04.2024

WTI edges lower to near $83.50 amid a weaker demand outlook following US GDP

26.04.2024

SNB’s Jordan: SNB will monitor inflation closely and adjust policy again when necessary

26.04.2024

EUR/USD continues slogging higher prior to March US core PCE

26.04.2024

Pound sterling holds gains ahead of US core PCE Inflation

26.04.2024

Forex Today: Japanese Yen falls on BoJ inaction, focus shifts to US PCE inflation

Support

Personal area

Trading
- Account types
- Market
- MetaTrader 4/5
Promotions
- Promotions
Investments
- Synchronous Trading
  - Rating
  - About Service
  - How it Works
  - FAQ
Analytics
- News and Tools
- Market analysis
  - Market Opinions
  - Technical Analysis
TeleTrade
- About brand
- Сooperation

Personal area

Forex Demo Account

Start Bonus 100%

Synchronous Trading

Our Advantages

Economic Calendar

This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.

Bank
transfers