It's too early to conclude it's the end of the dollar rally. Data in the U.S. should continue to be healthy and we could see rate expectations moving higher, supporting the dollar.
Even though there was a reasonable GDP figure the market was unwilling to give the yen good support. There's a consensus building that the BOJ isn't going to move quickly and that means the good news for the economy isn't enough to boost the yen further.
Monetary policy expectations were the driving forces on the FX markets in most of 2005 and while we expect structural problems to come back to haunt the dollar in 2006 we expect monetary policy expectations to lend support to the greenback early in the year.
Monetary policy expectations were the driving forces on the FX (foreign exchange) markets in most of 2005 and while we expect structural problems to come back to haunt the dollar in 2006 we expect monetary policy expectations to lend support to the greenback early in the year.
The market will be watching the consumer prices report, as the minutes have made it clear the Fed is watching inflation. The economic data has been strong and supportive for the dollar.
The current rate expectations are still supportive for the dollar. But now the market needs to be assured by upcoming economic data.