The Dollar continues to win despite a thin macro economic differential edge. News overnight that the US Fed is already discussing plans to raise rates would seem to conflict with the upside breakout in US Treasuries yesterday but the mere mention of rising US rates adds to the Dollar’s bull case, especially with the BOJ, PBOC and ECB all thought to be on the cusp of more stimulus. In short, the Dollar should continue to win by default, by slightly positive data and by periodic hawkish stories flowing from the Fed. In looking ahead, we suspect that US Personal Income and Spending figures will add to the Dollar’s slow and gradual rise on the charts. Initial support moves up to 80.25 and first resistance is seen up at 80.45.
