The U.S dollar slipped against major currencies this week as economy recovery was still vague, while the Fed signaled a further quantitative easing (QE) policy after its meeting on Tuesday.
Although the National Bureau of Economic Research (NBER) announced on Monday that the recession started in December 2007 officially ended in June 2009, the economy recovery was still fragile according to most investors.
In its statement released on Monday, the NBER said the recession lasted 18 months, which makes it the longest of any recession since World War II.
The conclusion by the NBER also meant that any future downturn in the economy would be considered a new recession and not a continuation of the recession that began in 2007.
The Federal Reserve said in a statement after its meeting on Tuesday that it will continue to monitor the economic outlook and financial developments.
On its meeting, the Fed decided to suspend a further monetary policy but signaled it was "prepared to provide additional accommodation if needed".
The dollar slumped against major currencies on the Fed's decision Tuesday. The euro against dollar jumped 1.4 percent compared with the prior trading day.
The dollar against yen slipped under 85.1, regardless of Japanese government intervention concern still lingered. The pound also surged against the dollar to above 1.56.
On Wednesday, the currency market still digested Fed's decision. The euro broke through a resistance level of 1.3350 against the dollar to a five-month high above 1.3400 in early Wednesday trading session.
According to the market's expectation, the monetary policy, or QE, would very likely be a massive buying of treasury bonds, which would push down the yield of treasury bonds and kept the interest rate exceptionally low.
The dollar against yen also dropped below 85, the lowest level since the Japanese government surprisingly intervened to stop yen' s rise last week.
Although the selling of dollar against yen still went on in the market, the risk of another intervention by Japanese was mounted. Traders believed Japan would step in between 83.00 and 85.00.
The dollar index, a measure of its performance against a basket of six currencies, dropped 0.9 percent to 79.694 on Wednesday, its lowest since mid-March.
A jobless claim provided by the Labor Department on Thursday gave pessimists in the markets more evidence to believe the economy was still facing double-dip recession risk.
The Labor Department announced that the number of people filing for first-time unemployment benefits rose 12,000 to 465,000 in the week ended September 18, while analysts were expecting the number to stay unchanged.
Meanwhile, reports showed slowing pace of Ireland's economy growth. Its GDP fell 1.2 percent in second quarter compared with the first quarter, surprising the market which predicted a 0.5- percent rise.
The concern on Irish economic situation spread to the whole euro zone and pushed down the euro. The euro against dollar fell below 1.34, well below Wednesday's five-month high of above 1.34.
The dollar against yen continued to decline slightly as traders worried a further intervention by Japanese government if yen kept its upward trend.
On Friday, the dollar slipped further as U.S. durable goods sales and new single home sale for August were worse than expected, and gave the market players more reason to believe the Fed would soon take action, which was bad news for the greenback.
The Commerce Department said durable goods orders for August dropped 1.3 percent after a revised 0.7-percent increase in July.
Last month's new home sales were unchanged from a month earlier at a seasonally adjusted annual sales pace of 288,000, the figure was down by 29 percent from the same month a year earlier.
The euro against dollar climbed to near 1.35 in Friday's session, a new high since it touched five-month high on Wednesday as German business confidence unexpectedly rose to its highest level in over three years in September.
Although the Japanese government kept quiet these days on whether to intervene the currency market for the second time, the dollar against yen did not show much decline as fear still existed.
For the whole week, the dollar index, a measure of its performing against a basket of six currencies, lost nearly three percent. Versus the yen, the dollar was down 1.7 percent.
The dollar was down 2.7 percent against the Swiss franc this week, while the euro gained more than three percent against the greenback.
The British pound climbed 0.09 percent this week against the dollar.
Although the National Bureau of Economic Research (NBER) announced on Monday that the recession started in December 2007 officially ended in June 2009, the economy recovery was still fragile according to most investors.
In its statement released on Monday, the NBER said the recession lasted 18 months, which makes it the longest of any recession since World War II.
The conclusion by the NBER also meant that any future downturn in the economy would be considered a new recession and not a continuation of the recession that began in 2007.
The Federal Reserve said in a statement after its meeting on Tuesday that it will continue to monitor the economic outlook and financial developments.
On its meeting, the Fed decided to suspend a further monetary policy but signaled it was "prepared to provide additional accommodation if needed".
The dollar slumped against major currencies on the Fed's decision Tuesday. The euro against dollar jumped 1.4 percent compared with the prior trading day.
The dollar against yen slipped under 85.1, regardless of Japanese government intervention concern still lingered. The pound also surged against the dollar to above 1.56.
On Wednesday, the currency market still digested Fed's decision. The euro broke through a resistance level of 1.3350 against the dollar to a five-month high above 1.3400 in early Wednesday trading session.
According to the market's expectation, the monetary policy, or QE, would very likely be a massive buying of treasury bonds, which would push down the yield of treasury bonds and kept the interest rate exceptionally low.
The dollar against yen also dropped below 85, the lowest level since the Japanese government surprisingly intervened to stop yen' s rise last week.
Although the selling of dollar against yen still went on in the market, the risk of another intervention by Japanese was mounted. Traders believed Japan would step in between 83.00 and 85.00.
The dollar index, a measure of its performance against a basket of six currencies, dropped 0.9 percent to 79.694 on Wednesday, its lowest since mid-March.
A jobless claim provided by the Labor Department on Thursday gave pessimists in the markets more evidence to believe the economy was still facing double-dip recession risk.
The Labor Department announced that the number of people filing for first-time unemployment benefits rose 12,000 to 465,000 in the week ended September 18, while analysts were expecting the number to stay unchanged.
Meanwhile, reports showed slowing pace of Ireland's economy growth. Its GDP fell 1.2 percent in second quarter compared with the first quarter, surprising the market which predicted a 0.5- percent rise.
The concern on Irish economic situation spread to the whole euro zone and pushed down the euro. The euro against dollar fell below 1.34, well below Wednesday's five-month high of above 1.34.
The dollar against yen continued to decline slightly as traders worried a further intervention by Japanese government if yen kept its upward trend.
On Friday, the dollar slipped further as U.S. durable goods sales and new single home sale for August were worse than expected, and gave the market players more reason to believe the Fed would soon take action, which was bad news for the greenback.
The Commerce Department said durable goods orders for August dropped 1.3 percent after a revised 0.7-percent increase in July.
Last month's new home sales were unchanged from a month earlier at a seasonally adjusted annual sales pace of 288,000, the figure was down by 29 percent from the same month a year earlier.
The euro against dollar climbed to near 1.35 in Friday's session, a new high since it touched five-month high on Wednesday as German business confidence unexpectedly rose to its highest level in over three years in September.
Although the Japanese government kept quiet these days on whether to intervene the currency market for the second time, the dollar against yen did not show much decline as fear still existed.
For the whole week, the dollar index, a measure of its performing against a basket of six currencies, lost nearly three percent. Versus the yen, the dollar was down 1.7 percent.
The dollar was down 2.7 percent against the Swiss franc this week, while the euro gained more than three percent against the greenback.
The British pound climbed 0.09 percent this week against the dollar.
