Greenback Pressured

Recently the US dollar has been pressured by a variety of factors. Despite last Friday’s rally and the successful auction of $65 billion of US Treasuries investors remain concerned about the speed of US recovery and mounting US deficits. Russia’s challenge to the greenback as the world’s reserve currency and their announcement that Russia would not purchase more US debt put further pressure on the dollar.

Investors Remain Uncertain About US Recovery Speed

A week age the dollar got a boost from better than expected non farm payrolls data but the figures were not enough to sustain a long term rally for the dollar. Steven Englander of Barclays Capital stated, “The numbers that came in, while they were somewhat stronger than expected, weren’t really strong enough to be a game changer with respect to the U.S. economic outlook. It didn’t change the view on risks of where monetary and fiscal policy was headed.” Investors remain uncertain about the speed of US recovery efforts and some investors feel they are in uncharted territory where US fiscal and monetary policies are concerned. These factors are affecting the dollar exchange rate around the world in Forex markets.

Lots of Data Due This Week

Economic data due this week could have a drastic effect on currency exchange rates. On Monday the Treasury International Capital flows (TICS) for April will be released and on Tuesday the May Producer Price Index and May housing starts will be posted. Also due on Tuesday is the May industrial output and is expected to post a month to month decline of 0.9%. Wednesday the May Consumer Price Index will be released and is expected to show a month to month gain of 0.3%.

G 8 Meeting Watched by Investors

Investors are closely watching the G8 finance ministers meeting but currency exchange rates are not expected to be a topic of discussion. The slew of economic data expected this week should make it a very interesting week for Forex markets.