The U.S. Dollar declined against every major currency last week with the exception of the New Zealand Dollar which lost only 0.2% against the Greenback. The U.S. currency was particularly weak against the Japanese Yen which tested the 86.00 level last week and the Euro which managed to stay above the important 1.3000 psychological level.

The weakness in the U.S. Dollar's performance against most major currencies last week was due in large part to the increasingly pessimistic outlook for the U.S. economy. The pessimism arose from a combination of dovish statements in the FOMC minutes, released two weeks ago, along with Fed Chair Ben Bernanke's "unusually uncertain" outlook for the economy he described in last week's testimony before the U.S. Congress.

In addition to the previous two weeks Fed's statements, last week saw the release of the Fed's Beige Book economic report on Wednesday. In the release, the Fed reported that economic activity in the Federal Reserve's twelve districts "continued to increase, on balance, since the previous survey". Nevertheless, the report expressed concerns over difficulties in the housing sector stating that, "Nearly all Districts reported sluggish housing markets in the months since the homebuyer tax credit expired on April 30."

U.S. stocks closed virtually unchanged last week with the Dow Jones Industrial Average gaining 0.4% while the broader based S&P 500 declined by 0.1% and the Nasdaq declining by 0.7%. Despite last week's performance, U.S. stocks showed the best monthly gain this year with an overall monthly increase of seven percent. Stocks rallied last month partly due to a rash of positive earnings reports from major U.S. corporations and despite mixed to negative economic numbers.

Commodity prices also showed little changed last week with gold futures ending at $1,181 per ounce and crude oil closing just under $79 per barrel.

Last Week's U.S. Data Review

U.S. economic releases last week continued showing a mixed bag of results, with some indicators showing improvement while others indicating a continued weakness in the U.S. economy.

Monday started the economic releases with New Home Sales, which came in at 330k better than the consensus of 317K, with the previous number revised downward to 267K from 300K. On Tuesday, the S&P/CS Composite-20 HPI rose by 4.6% year on year, versus a rise of 3.9% expected. Also out on Tuesday, CB Consumer Confidence printed at 50.4 versus an expected reading of 51.3, with the previous number revised upward to 54.3 from 52.9.

On Wednesday, Core Durable Goods Orders come out showing a drop of -0.6% month on month, which was considerably less than the 0.6% expected. Durable Goods Orders, also out Wednesday, declined by -0.1% month on month, versus an increase of 0.9% expected, and the Fed's Beige Book report which was released on Wednesday afternoon.

Thursday saw Initial Jobless Claims decline to 457K from a revised 468K, in line with expectations. The highlight of the week, however which came out on Friday, was the U.S. Advance GDP report. The number showed that GDP had risen only 2.4% quarter on quarter versus an expected 2.5%, although the previous quarter's release was revised upward significantly to 3.7% from 3.2%. Also, the Advance GDP Price Index beat expectations coming out at 1.8% versus 1.1% expected.

Friday releases also included the Chicago PMI which came out with a reading of 62.3 which was significantly better than the consensus of 56.3 expected and the Revised University of Michigan Consumer Sentiment Indicator, which came out at 67.8, versus 67.3 expected

Fundamental Data Outlook for the United States

The coming week of economic data releases for the United States heats up considerably versus the previous week, and offers some interesting data for forex traders on the U.S. economy. The U.S. economic calendar features the very important U.S. Employment Data due out on Friday.

Monday starts the week off with ISM Manufacturing PMI (54.3), Construction Spending (-0.4% m/m) and ISM Manufacturing Prices (55.3), as well as speeches by Federal Reserve Chairman Bernanke in Charleston and FOMC Member Tim Geithner in New York.

Tuesday offers the Core PCE Price Index (0.2% m/m), Personal Spending (0.1% m/m), Personal Income (0.2% m/m), Pending Home Sales (0.9% m/m), Factory Orders (0.0% m/m) and Total Vehicle Sales (11.6M).

Wednesday starts the employment data releases with Challenger Job Cuts (last -47.1% y/y) and the ADP Non-Farm Employment Change (36K), plus other data including ISM Non-Manufacturing PMI (53.3).

Thursday just has Initial Jobless Claims (456K), while Friday is the weekly highlight, featuring the very important Non-Farm Payrolls Change (-75K), the U.S. Unemployment Rate (9.6%), Average Hourly Earnings (0.1% m/m), Consumer Credit (-5.4B m/m). That ends the week.