The forex market reacted to major economic data publications this week. Inflation and job market data in the US added to the volatility of the US dollar and have impacted traders’ expectations regarding monetary policy.
Traders have pared down their anticipation of a new rate hike for this year as the data strengthened the possibility for rates to stay unchanged. However, attention could remain on new data with the Federal Reserve’s minutes expected next week.
The market also reacted to the stronger-than-expected GDP growth and manufacturing figures in the UK.
The positive data could help improve traders’ view of the British pound and support the currency which has been declining for the last few weeks.