Growth momentum is back in America? That is what investors believe after the positive surprise from the latest US GDP release. The second US GDP release for Q4 2015 was revised higher to 1% from 0.7%. Core PCE Inflation was also encouraging, reflecting a 1.67% rate of inflation. But while data from the last quarter has certainly been less anaemic, Dollar bulls shouldn’t pop the champagne just yet. Doubts over the current quarter continue to exist. Risks still loom and hurdles need to be cleared before we get another move higher.
What Looms On The Dollar?
Of course, I continue to reiterate that the Dollar’s long-term trajectory is still up. However, there are soft patches along the way because even the US economy can’t always perform well. And when those soft patches occur the FX market will be filled with doubt and the Dollar will dip again.
Then, when once again it becomes clear the US economy is still the outpacing its peers, confidence will return. And with that, we will get another bullish wave. But as long as there is doubt the Dollar will find it hard to break into new highs. Continue reading "Doubts And Fears Still Loom For The Dollar"