If you were looking for a bullish argument to make for the dollar, this past week seemed to offer up a considerable docket of evidence. However, much of the greenback’s strength comes though indirect and unsubstantiated factors – like the sharp drop from the euro this past week.
The Euro took a big hit after the European Central Bank meeting on Thursday, sending it down across the board, and placing it last among the majors for the first full week of February.
The Japanese Yen retraced to 92.74 against its US counterparty on Friday’s close - lower than last Friday’s close - as Japanese Finance Minister Taro Aso said the pace of the Yen’s slide may have been too rapid.
The outlook for monetary policy has been a main driver of gold prices as improving economic data and central bank rhetoric continue to suggest that the domestic recovery is gathering pace.
The Australian Dollar suffered heavy losses last week in the wake of the RBA monetary policy announcement. The central bank kept the benchmark lending rate unchanged at 3 percent as expected but the statement released following the sit-down clearly opened the door for further easing in the months ahead.
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