Dollar bulls are having their best day in weeks. Dollar is currently trading at 95.3, up 1.25% today.
- First support was given by San Francisco FED, which published a report arguing that US economy may not be as weak as data are showing in the first quarter. Rather it is seasonality.
- Big blow was to Euro, when European Central bank’s executive board member Mr. Coeure suggested that pace of purchase can be increased if required. He also said that ECB will be frontloading purchase in May and June, thus buying more bonds than planned € 60 billion/per month and adjusting later. Euro moved lower by 1.6% and pushing dollar higher.
- Weaker than expected inflation pushed pound lower and dollar higher.
Finally better than expected housing stats provided the necessary support to dollar leg pushing major counterparts further down against dollar.
- Building permits in April grew to 1.143 million from 1.042 million prior.
- Housing starts grew to 1.135 million in in April from 0.926 million in March.
Rate hike bets would resurface if US economy recovers from first quarter slump faster than expected.
The material has been provided by InstaForex Company – www.instaforex.com