The past trading week was marked by several important events, and they were positive for the US dollar for the most part. As a result, the greenback rallied against the euro and the Great Britain pound, but was soft versus commodity currencies.
The long-awaited testimony of former FBI director James Comey turned out to be a non-event, largely disregarded by markets as it did not provide any shocking revelations.
The policy meeting of the European Central Bank also did not provide many surprises, though it was not as hawkish as some market participants had expected, driving the euro down.
Yet the most important event with a shocking outcome turned out to be Britain’s general election. While most polls promised a majority of seats in the parliament for the ruling Conservative party, in reality the voting resulted in a hung parliament. That will make discussions between the United Kingdom and the European Union more complicated, though some analysts argued that was a blessing in disguise as it may result in a softer Brexit.
The Canadian dollar was under pressure from falling prices for crude oil, but bounced on Friday with the help of the surprisingly good employment report.
EUR/USD dropped from 1.1271 to 1.1194 over the week. GBP/USD declined from 1.2858 to 1.2738. USD/CAD closed at 1.3466 after starting the week at 1.3491.
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