Forex Flash: Dollar overstretched and looking for correction – BBH
FXstreet.com (Barcelona) - Marc Chandler of Brown Brothers Harriman notes that last week saw the dollar get a bit overstretched and he is expecting a touch of consolidation/correction ahead.
He feels that the pace and magnitude of the move was surprising, especially in the light of a series of disappointing developments in Europe, namely the failure to resolve Greece's funding problems and the EU's next budget. He adds that economic data was hardly inspiring with the November flash PMIs suggesting the Euro area economy will continue to contract further in Q4.
In contrast, he notes that the US reported stronger than expected home sales and housing starts as the painfully slow recovering in the housing market continues. He finishes by writing, "Weekly initial jobless claims slipped back as the impact of the east coast storm fades. The newly introduced Markit PMI reading was above consensus forecasts. The University of Michigan's final consumer confidence measure for November was a bit softer than the preliminary report, but still is at 4 1/2 year highs."
He feels that the pace and magnitude of the move was surprising, especially in the light of a series of disappointing developments in Europe, namely the failure to resolve Greece's funding problems and the EU's next budget. He adds that economic data was hardly inspiring with the November flash PMIs suggesting the Euro area economy will continue to contract further in Q4.
In contrast, he notes that the US reported stronger than expected home sales and housing starts as the painfully slow recovering in the housing market continues. He finishes by writing, "Weekly initial jobless claims slipped back as the impact of the east coast storm fades. The newly introduced Markit PMI reading was above consensus forecasts. The University of Michigan's final consumer confidence measure for November was a bit softer than the preliminary report, but still is at 4 1/2 year highs."
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