This week the dollar ended with the highest rate against the European common currency. This happened after it has been suggested by the positive reports in the U.S. that the North American economy’s pace of recovery is accelerating. This in turn attracted investors to dollar priced assets.

Dollar supported by better than expected US Retails Data

The dollar gained versus most of the 16 main traded currencies reverting a losing streak this week by which it was set to the lowest level in 2009 in the beginning of December. This gain was the result of a report published in the United States indicating better than expected figures for retail sales and an increase in consumer sentiment.

New Zealand dollar gained against Dollar

The New Zealand dollar was one of the very few currencies that gained against the greenback as the South Pacific nation is likely to start a series of interest rates hikes as suggested by the Reserve Bank of New Zealand, which would be following its neighboring Australia. Australia has been the first wealthy nation which has raised borrowing costs after the global slump.

Expectation of Federal Reserve to raise borrowing costs

It has been affirmed by a part of analysts that the dollar bearish days are over, as positive reports are likely to continue to be published and this will lead theFederal Reserve to raise borrowing costs earlier than previously expected.

This increase in borrowing cost would cause a massive capital inflow to the U.S. and it will help in recovering the greenback’s attractiveness in foreign-exchange markets.

EUR/USD

As of 15:43 GMT  EUR/USD closed the week at 1.4611 from a previous rate of 1.4733 on Thursday. GBP/USD were at 1.6260.

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