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Forex pairs in this Article » EUR/USD (Barcelona) - Derek Halpenny, European Head of Global Markets Research at the Bank of Tokyo Mitsubishi UFJ notes that yesterday was another example of how the dollar is now more tightly linked to incoming data from the US.

He feels that its no surprise of course, given that Fed Chairman Bernanke underlined the importance of incoming data in determining the timetable of QE3 tapering in the months ahead. He writes, “The durable goods report, the Case-Shiller house price data, consumer confidence and the new home sales report were all essentially stronger than expected and lent support to the idea of QE3 tapering at the September meeting.” Halpenny feels that this was particularly the case for the housing and consumer confidence data. He writes, “The m/m increase in house prices (1.7%) was the second largest on record while the consumer confidence index at 81.4 in June, was the strongest since January 2008 – confidence has made a clear break above levels that have persisted throughout the 5-year period since the collapse of Lehman Brothers and that will be encouraging for the QE3 tapering believers on the FOMC, which of course bodes well for the dollar.”
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