Flash: USD resilience in question? – Investec

FXstreet.com (New York) - The general theme of last week was of traders sitting at their desks as they squared their long USD positions, causing the US dollar to lose further ground against many of the G7 currencies to almost completely wipe out the gains it made at the beginning of July, notes Jonathan Pryor, Corporate Treasurer at Investec.

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As such, “the GBP/USD traded higher throughout the week as sterling was supported by an assured delivery from Mark Carney of the quarterly inflation report, which didn’t spell out the extreme dovish tone that many expected.”

“Notably for the GBP/USD it failed to close the week above the key technical lever of 1.5535 (two hundred day moving average) and it finds itself back just below 1.5500 this morning after the USD stabilized slightly in the Asian session overnight.”

“The dollar weakness last week was picked up by the Wall Street Journal, which highlights the extent of the turnaround in recent weeks. The article claimed investors were beginning to question the relative strength of the US economic recovery and US retail sales figures released tomorrow will be the next test of potentially waning sentiment towards the world’s reserve currency.”