The U.S. dollar traded lower against all of the major currencies this past week on the lack of consistently positive data. Big disappointments in GDP and a steep decline in durable goods raised concerns about the strength of the U.S. recovery. The majority of market participants don’t expect the Fed to raise interest rates until the second half of next year but after this week’s reports, the odds of a rate hike in June 2015 fell to 50% from 60% a week ago.

Non-Farm payrolls are scheduled for release next week along with ISM and many traders are wondering if a healthy jobs number will be enough to stem the slide in the greenback. Unfortunately the chance of a strong recovery in the dollar is slim, even if non-farm payrolls beat expectations. The problem is that the recovery is too slow and unless payrolls rises by 300k or more for 2 straight months, the Fed will stick to their plans to keep interest rates low for an extended period of time. As such I am expecting USD to decline further against other major currencies in coming weeks.
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