The Dollar underwent a volatile trading week against the major currencies. The EUR/USD was traded between the 1.4200 and 1.4400 levels without showing a clear direction. The Dollar continued the rising trend against the Pound, yet saw bearish activity against the Yen.
The greenback's unstable trading week took place largely due to the mixed results published from the U.S economy. While the Consumer Confidence report showed a surprising improvement in consumers' confidence regarding their financial outlook. Also, the housing sector continues to show signs of recovery as 433,000 New Home Sales were sold during July, marking a 9-month record. The Preliminary Gross Domestic Product (GDP) dropped by 1.0% in the second quarter of the year, showing that the American economy continues to contract, despite some optimistic reports.
In addition, the weekly Unemployment Claims report showed that 570,000 individuals have filed for unemployment insurance for the first time during the past week, questioning that the employment conditions in the U.S have entered a recovery process.
Looking ahead to this week, many impacting data is expected from the U.S economy, and above all the Non-Farm Employment Change report which is expected on Friday. The main publications for this week will include the Pending Home Sales on Tuesday. A positive result could strengthen the notion that the housing sector is recovering, which could boost the Dollar. The Manufacturing Purchasing Managers' Index on Tuesday is also likely to create strong volatility in the market. Yet the Non-Farm Payrolls on Friday is likely to affect the Dollar the most. Traders are also advised to follow the ADP forecast on Wednesday, as its results have proven to impact the Dollar in the short-term.