The U.S. dollar appreciated during the week against major pairs. The currency got a boost from the release of the minutes from the January Federal Open Market Committee meeting. The brief statement was slightly hawkish, but the full notes from the meeting revealed the U.S. central bank upgraded its economic projections from those made in December and expects the 2% inflation target to be met in the mid-term.
The U.S. dollar depreciated across the board versus major pairs despite consumer prices rising more than expected. Inflation anxiety had triggered a sell-off in global stock markets with the Fed expected to ramp up their interest rate hike path yet the dollar did not benefit as higher rates have already been priced in by the market.
The U.S. dollar had its strongest week against major currency pairs in 12 months. Even as the United States is suffering a bout of political uncertainty, the dollar became a safe haven as stocks and bonds saw massive moves this week. The signing of a federal budget by U.S. President Donald Trump boosted the dollar ahead of the release of retail sales and inflation data next week. Central banks are moving away from record low interest rates around the globe.
The U.S. dollar rose against major pairs on Friday. The release of the U.S. nonfarm payrolls (NFP) proved to be the much needed shot in the arm after the greenback was under pressure for most of 2018. The job gains were above expectations but more importantly, the hourly wages came in higher, giving the Fed a potential green light to hike 3 or 4 times in 2018. The market is estimating a 77.5% probability of the first rate lift to come in March.
The U.S. dollar depreciated against majors as soft Q4 GDP numbers on Friday and mixed comments on the desired strength and weakness of the currency made at the World Economic Forum in Davos put downward pressure on the greenback. The Trump administration is pushing its tough stance on trade, but tried to soften the tone in an effort to be more inclusive.