The forex trading week has come and gone, so it’s time to take forex fomc statements look at how the major currencies performed and what drove price action. Looking at the table of top 10 movers, we can see that 7 out of 10 are USD pairs, with the Greenback on the winning side in all of ’em.
It’s therefore pretty clear that Greenback strength was the dominant theme this week. So, what pushed USD higher this week? And what about the other currencies? Well, read on and find out!
But before that, here’s this week’s scoreboard. And if you only want to find out what happened to a specific currency, then you can just skip to that currency by clicking on it below. Well, the Greenback did gap higher across the board alright. However, the Greenback’s price action quickly became a mess as traders tried to close the gaps on most Greenback pairs. Anyhow, it didn’t become clear until Wednesday that the Greenback was getting bid higher across the board. Greenback was well-supported on Tuesday because of cautious optimism that we would see further progress on the tax reform bill. Both events didn’t really trigger an explosive reaction on the Greenback.
However, wage growth only printed a 0. Also, the previous reading was downgraded from flat to a 0. The NFP report wasn’t able to derail expectations for a rate hike next week, though, which is why the bearish reaction to the poor wage growth was limited. And on that note, make sure to keep an eye on the Greenback next week since the final FOMC statement of the year is coming up. Also, we’ve got other top-tier U.
Of course, fresh news on the tax reform bill will likely still have an impact on the Greenback’s price action. After all, both the House and the Senate only voted this past week to start the process of reconciling their respective versions of the tax bill, so this drama is not over yet. The euro had a mixed performance this week and price action across euro pairs were mixed and messy, with periods of diverging price action. We can therefore conclude that the euro was vulnerable to opposing currency price action during this past week. Also, the political limbo in Germany hasn’t been resolved yet.
Talks are expected to start next week, although most political commentators think a deal won’t be hammered out until early next year. Also, it’s worth pointing out that the news of that positive development in German politics didn’t really have a major impact on the euro’s price action, but hopefully we’ll get more action next week as coalition talks start. We’ll also be getting the latest batch of PMI reports for the Euro Zone. And we also have the final ECB statement and presser for the year to look forward to.
So we’ll hopefully get more uniform price action from the euro next week. The pound had another good run and was this week’s second best-performing currency after the Greenback. The pound’s gains were relatively small, though. Thursday, likely due to preemptive positioning on speculation that British PM Theresa May and European Commission President Jean-Claude Juncker will announce a breakthrough in Brexit talks during their scheduled joint statement on Friday.