As what has been mentioned in the recent analyses the greenback has been underpinned by the Fed of interest rate decision which is waited later today because of the recent US improving of US consuming and labor data. We have seen last Friday US November retail sales which were expected to be up monthly by just .6% coming at 1.4% and the preliminary release of US UN Michigan University consuming sentiment survey of December which was forecasted to be 68.5 from 67.4 in November and coming at 73.4 which could add to the market speculations of a near coming tightening action staving off the US quantitive easing policy of the Fed which started after the release of the better than expected labor data of November which have shown falling of the unemployment rate to 10% from 10.2% in October and losing of just 11k in US out of the farming sector which have interpreted to a nearer coming Fed's tightening action than what was discounting as the Fed's governors have repeated several times that there is no change of the Fed's easing policy without a crucial change in the labor market.

The single currency which is still suffering from the negative impact of the Greece huge unsustainable debts worries and the new worries about the Austrian banking system could not find support from the release of the Germane ZEW of economic sentiment of December which came down to 50.4 from 51 in November. The greenback could easily keep its gained technical momentum pushing it down to test 1.45 with the markets waiting for Fed's US assessment today which is expected to show firmer talking about the inflation upside risks in appreciating of the recent improving of the consuming pace and the labor market and these speculations can increase, if we are to have higher than expected US CPI figures of November today by the interest rate decision. The Market is waiting for the core monthly figure excluding the food and energy to be up by .2% as the same as October and y/y by 1.8% from 1.7% in October and the broad figure to be up monthly by .4% and yearly by 1.7%.

The gold which could hardly close above 1110$ last week is still hovering above it as the greenback could keep its recent gains easily across the broad  with the crude oil prices falling below 70$ weighing on the inflation upside risks in a time of waiting for a  closer tightening action by the fed or at least an optimistic assessment which can smooth to this action.


Best wishes

 

FX Consultant

Walid Salah El Din

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