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The U.S. dollar was mixed throughout the week, but closed as a net loser as weakening U.S. data and the Fed’s promise of low rates for longer-term were the main drivers that kept the bears in control.

Overlay of USD Pairs: 1-Hour Forex Chart
Overlay of USD Pairs: 1-Hour Forex Chart
USD Weekly Performance from MarketMilk
USD Weekly Performance from MarketMilk

United States Headlines and Economic data

Monday:

No major data or news from the U.S. during the Monday session, but the Greenback drifted lower against the majors.  This was likely driven by rising risk sentiment as U.S. equities recovered from recent weakness and possibly on positive COVID-19 vaccine related headlines (news of AstraZeneca resuming its phase three coronavirus trials). It’s also likely traders were positioning for a potentially dovish FOMC statement later in the week.

Tuesday:

U.S. manufacturing production increases in August

New York Manufacturing Index Jumps More Than Expected In September

U.S. import prices beat expectations in August as inflation warms up

Trump walks back aluminum tariffs on Canada

Wednesday:

Sally strengthens into Category 2 hurricane

U.S. consumer spending appears to slow in August

Mortgage Applications Decrease in Latest MBA Weekly Survey

Homebuilder sentiment soars to record high, but lumber prices raise a red flag

US retail sales slows after extra jobless aid lapses

Fed vows to keep rates near zero until inflation tops 2%, likely keeping meager rates 4 to 5 years – financial markets went into risk-off mode after the FOMC gave no indication of increased stimulus measures as expectations of economic contraction will not be as extreme as originally thought (Fed 2020 GDP estimates improves to -3.7% vs. its June estimate of -6.5%, Unemployment rate projected at 7.6% by end of year vs. the previous estimate of 8.4%)

Thursday:

The Greenback’s rally begins to lose its luster during the Thursday Asia session, possibly on counter currency flows as the turn correlated with the weak but better-than-expected reads on Australian employment and New Zealand GDP.

Philly Fed index fell 2 points to 15.0 in September

Another 860,000 Americans filed for unemployment benefits last week

U.S. housing starts fall more than expected in August as multi-family home construction slumps

Federal Reserve mulls extension of bank dividend and buyback curbs

Friday:

U.S.-China investment flows slide to nine year-low as bilateral tensions escalate

Fed’s Bullard says ‘biggest growth quarter of all time’ will lift inflation

U.S. Consumer Sentiment Climbed to a Six-Month High in September

Fed’s Kashkari says pandemic aid was also ‘banking bailout’

We saw some gains for the Greenback during the U.S. session as risk sentiment shifted negative ahead of the weekend. This was likely on a combination of scenarios ranging from a low expectancy of a new stimulus package from the U.S. government, the possibility of the U.K. locking down once again, and as the U.S. tech sector continued to fall)