Last week the Dollar saw mainly downtrends against the major currencies. The USD dropped to a 14-month low against the EUR, as the EUR/USD pair reached the 1.4965 level. The Dollar weakened against the Pound as well, hitting as low as 1.6395.
It appears that the Dollar dropped due to some positive data from the U.S economy. The Core Retail Sales rose by 0.5% in September, beating expectations for a 0.3% rise. The core report measures the change in the total value of sales at the retail level, excluding automobiles and airplanes, due to their large volatility. The Core Consumer Price Index rose by 0.2%. This was the 9th consecutive time that this crucial indicator rose, and is one of the strongest signs that the American economy is recovering.
Last week's trading session proved once again that positive data from the U.S economy is continuing to only drives investors into riskier investments, and not yet into the Dollar. Furthermore, it seems that positive publications from the U.S help support the Euro, as the European nations rely greatly on U.S consumption.
As for the week ahead, many influencing news events are expected from the U.S economy. The housing data seems to be the most intriguing data this week as the Building Permits are expected on Tuesday and the Existing Home Sales on Friday. Many analysts share the assumption that the real-estate bubble has caused this recession, and thus only the housing sector can pull the economy out of recession. This means that the results of these reports should have a large impact on the market, and traders should use it as best they can in their trading tactics.