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Greenback extends gains on home sales

The greenback has remained the star of the week, with some positive economic data helping it along.

Greenback
Source: Bloomberg

New home sales hit a six-year high and helped the US dollar extend its gains, while attention was focused also on comments by Fed members. Mester reiterated her opposition to the considerable time reference and said she feels the dot plot analysis is a more accurate representation of the committee’s views. Meanwhile, Evans maintained his dovish view and said the Fed should be exceptionally patient before adjusting monetary policy. It certainly seems all roads lead to the dot plot analysis at the moment and it seems the members who are still overly dovish are a bit out of touch.

USD/JPY heading towards last week’s highs

Having said that, the dollar index extended its gains and nudged through 85 for the first time since 2010. This was a result of the greenback gaining ground against majors such as the euro and yen. In fact, USD/JPY is trading back above ¥109.00 and is not far off last week’s high of ¥109.46. An uptrend has been in place on the daily chart since August, and it seems this will continue to hold in the near term. Later today we have durable goods orders and unemployment claims due out of the US. Japan CPI will come into play tomorrow.

USD/JPY
Click to enlarge

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