US dollar: fresh seeds of doubt?
The US currency extended the decline versus the other majors on the past week. By the end of the week the US index declined towards the 94 mark, staying below the 11-year peak hit in January. Meanwhile, the US stock indices pushed higher with the S&P 500 hitting a 2015-high, while Nasdaq – a 15-year high.
Dollar bulls were disappointed by the weaker-than-expected retail sales data released on Thursday. What’s more, jobless claims rose more than forecasted. Expectations for the Fed’s rate hike in mid-2015 have also been hit by the rate cut in Sweden. It’s now becoming more and more difficult for the US to stay “hawkish” in a currency wars period.
Long-term USD prospects remain upbeat, but the question is when the rally will resume. On the new week market demand for the dollar as a safe haven will be defined by the course of Greek negotiations and by the news from Ukraine. United States are scheduled to release the Fed’s monetary policy minutes on Wednesday – we’ll see what the monetary authorities do really have in mind.