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21 May 2015
Doubts in the USD rally – Westpac
FXStreet (Barcelona) - Richard Franulovich of Westpac, notes that although USD shows signs of having resumed its upside rally, the recent data says otherwise.
Key Quotes
“USD showing some tantalising signs that its longer term uptrend has resumed and confidence among USD bulls has been resurrected. But even as we remain constructive on the multi-quarter USD outlook we are not yet prepared to sound the all-clear right here.”
“Housing starts and jobless claims aside, the broad trend in the US data remains thoroughly uninspiring. If our surprise index is anything to go by the Q2 bounce back so far looks underwhelming. The deflation in the energy patch and the appreciation of the USD seem likely to keep next week’s durable goods orders and PMIs flat-footed, while the flattening out in the NAHB index in recent months portends more neutral reads for new and pending home sales next week. We are wrong if the USD index punches through 96.20.”
Key Quotes
“USD showing some tantalising signs that its longer term uptrend has resumed and confidence among USD bulls has been resurrected. But even as we remain constructive on the multi-quarter USD outlook we are not yet prepared to sound the all-clear right here.”
“Housing starts and jobless claims aside, the broad trend in the US data remains thoroughly uninspiring. If our surprise index is anything to go by the Q2 bounce back so far looks underwhelming. The deflation in the energy patch and the appreciation of the USD seem likely to keep next week’s durable goods orders and PMIs flat-footed, while the flattening out in the NAHB index in recent months portends more neutral reads for new and pending home sales next week. We are wrong if the USD index punches through 96.20.”