Dollar picks up ahead of data and concern over emerging markets
May 25th - Concern over the ongoing shake-out in emerging markets pushed the greenback back into favour with investors last night, with the dollar posting gains essentially across the board as a result. There’s been little else around to provide any real direction in recent trade although falling plant utilisation and lacklustre supermarket sales in Japan have once again prevented the Yen from moving any higher. The economic calendar is however due to pick up through today’s session after a slow start to the week, most notably with the release of US durable goods orders and new home sales. As always the threat of inflationary pressures on the US economy will be closely watched as traders are still unsure as to when they might see a definite end to the Fed’s hawkish stance over monetary policy. Downbeat data today could therefore prove sufficient to reverse at least some of the dollar’s recent gains, but with oil prices rising once more and crude trading over $70 a barrel, the question has to be asked as to just how quickly this run of rate hikes will cease.
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