US Dollar fights back
US December Durable Goods Orders came in strong at +3.1% against expectations of +3% on Friday. New Home Sales came in stronger than expected at 4.8% in December and prices rose as the number of homes on the market decreased.
This week sees the first estimate of fourth quarter GDP and the FOMC rate announcement on Wednesday and Non-Farm Payrolls for January on Friday. If there are further signs of a soft landing from this data then we may see another push higher in the US Dollar.
The surprise voting balance which emerged last week from the Bank of England certainly took the wind out of the Sterling’s sails. Despite robust Retail Sales and GDP, the market will question the bank’s conviction going forward regarding another rate rise in March and as such we may have seen a temporary high.
BoE member David Blanchflower said he was ‘hawkish on inflation’ but he had not voted for the last three rate hikes and was dismissive of fears surrounding pay rises in the new yea pay round . A light UK economic data week with peripheral releases including PMI Manufacturing on Thursday.
ECB President Trichet commented on Sunday that there is a risk of second round effects from the increase in oil prices and a risk of starting an inflationary spiral. ECB council member Weber also reiterated Trichet’s comments and observed that most economists expect oil prices to rise again.
He stated that the Eurozone should not be satisfied with an inflation rate just below two percent if it is based on a temporary drop in oil prices. The market expects another 25 basis point interest rate rise in March.
Economic data today is sparse with only UK CBI distributive trends report due.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
This week sees the first estimate of fourth quarter GDP and the FOMC rate announcement on Wednesday and Non-Farm Payrolls for January on Friday. If there are further signs of a soft landing from this data then we may see another push higher in the US Dollar.
The surprise voting balance which emerged last week from the Bank of England certainly took the wind out of the Sterling’s sails. Despite robust Retail Sales and GDP, the market will question the bank’s conviction going forward regarding another rate rise in March and as such we may have seen a temporary high.
BoE member David Blanchflower said he was ‘hawkish on inflation’ but he had not voted for the last three rate hikes and was dismissive of fears surrounding pay rises in the new yea pay round . A light UK economic data week with peripheral releases including PMI Manufacturing on Thursday.
ECB President Trichet commented on Sunday that there is a risk of second round effects from the increase in oil prices and a risk of starting an inflationary spiral. ECB council member Weber also reiterated Trichet’s comments and observed that most economists expect oil prices to rise again.
He stated that the Eurozone should not be satisfied with an inflation rate just below two percent if it is based on a temporary drop in oil prices. The market expects another 25 basis point interest rate rise in March.
Economic data today is sparse with only UK CBI distributive trends report due.
The contents of this blog are for information purposes only. It is not intended as a recommendation to trade or a solicitation for funds. The Wise Money Blog cannot be held responsible for any loss or damages arising from any action taken following consideration of this information.
posted by Drs Search @ 9:58 AM
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