Forex Review: Dollar rally paused; yen rebounds

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After a sizeable move up against the yen during the past week, the dollar gave up some gains as investors began to take profits. USDJPY  had hit a new eleven-month high of 84.16early on Thursday and began its decline through the European and US trading session to 83.18 before bouncing slightly. The overall  view that the US economy is improving has helped lift the dollar in recent days, especially after the Federal Reserve meeting on Tuesday.

Euro clawed back some losses against the dollar as well, moving off an early four-week low of 1.3003, to climb through out the day up to a high of 1.3118 in New York trading. The dollar rally has run out of steam and is taking a pause. This was evident after positive US jobless claims data. Even though claims fell to around the lowest level in four years, the dollar was little changed after the data.

The ICE dollar index , which tracks the dollar against a basket of major currencies, fell to 80.158, down from 80.596 in late North American trading on Wednesday.

Gold had a chance to make some gains due to the weaker dollar. The two assets usually have an inverse price relationship. On Wednesday, gold priced in USD fell to the lowest level since mid-January. During the US session today, gold rose to $1,666.22 to gain over $32 from the Wednesday low.

Swiss franc strengthened against the euro and dollar after the Swiss National Bank raised its growth forecast at its policy meeting today and kept the euro/Swiss floor at 1.20 francs. The swissy fell to a one-month low against the euro and dollar on Wednesday over concerns of a raise in the 1.20 floor. But after the SNB meeting today, EURCHF fell to 1.2065 versus 1.2146 yesterday. USDCHF fell to 0.9200 from Wednesday’s high of 0.9333