US dollar index surges to 77.50 (highest since Sep 8th) as EURUSD breaks below $1.44 for the first time in 3 months, further nearing our HotChart target of $1.4270. GBPUSD drops to $1.62, awaiting Nov retail sales (exp +0.5% from +0.4%), which could decide the fate of the currencys trajectory. Disappointing UK sales would risk retesting $1.6160, followed by $1.6130, while any rebound remains capped at $1.6370. USDCAD tests the 3-month trend line resistance from at 1.07, eyeing interim target at 1.0740.
This arcticle seemed to be a good summary to me so just posting it alongside here :
"WORLD FOREX: Dollar Rises As Euro, Pound Knocked Lower
By Nicholas Hastings
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--Optimism over the U.S. economic recovery is lifting the dollar higher in Europe Thursday while continued concern about Greece's debt problems is further undermining the euro.
The pound, meanwhile, was hit hard by a disappointing set of U.K. retail sales numbers.
The improvement in sentiment could well prove a turning point for the U.S. currency in the longer-term, but short-term gains are limited, particularly against the yen, by market concern that new data later in the day might be disappointing.
The latest jobless claims from the U.S. are likely to show another improvement and encourage strong forecasts for the next set of employment numbers. However, the Philadelphia Fed survey for December is expected to show a decline, with the activity index to fall to 16.4 from 16.7.
Some analyst warned that the data could well be skewed to the downside given that the latest Empire State survey Monday fell more sharply than anticipated. The two surveys are closely correlated.
Over the last week, economic data have become an even more important driving force for the dollar, with risk sentiment proving of secondary importance.
The latest FOMC statement on Wednesday helped to confirm this shift in market focus, when the dollar was boosted across the board by slightly more hawkish comments from the Fed, which raised expectations that the end of the central bank's ultra-loose crisis policy is approaching.
Although the Fed repeated that rates will be left unchanged for a "an extended period," the central bank confirmed it will start unwinding liquidity in February next year as previously planned.
The Fed statement came soon after Standard & Poor's downgraded its credit rating for Greek debt. The move had been widely expected after Fitch made a similar announcement weeks ago. However, the euro still sank as the whole issue once again became a hot market topic, with investors speculating over how Greece will resolve its debt problems.
The pound also found itself being knocked sharply lower after new figures on U.K. retail sales showed a 0.3% fall last month. The market had been looking for a 0.6% rise.
By 1030 GMT, the dollar was up a little at Y89.91 from Y89.78 late on Wednesday in New York, according to EBS. The U.S. currency reached a high of Y90.27 before falling back.
The euro was down at $1.4365 from $1.4531 and at Y129.05 from Y130.45. The dollar was also up at CHF1.0487 from CHF1.0387.
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"WORLD FOREX: Dollar Rises As Euro, Pound Knocked Lower
By Nicholas Hastings
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--Optimism over the U.S. economic recovery is lifting the dollar higher in Europe Thursday while continued concern about Greece's debt problems is further undermining the euro.
The pound, meanwhile, was hit hard by a disappointing set of U.K. retail sales numbers.
The improvement in sentiment could well prove a turning point for the U.S. currency in the longer-term, but short-term gains are limited, particularly against the yen, by market concern that new data later in the day might be disappointing.
The latest jobless claims from the U.S. are likely to show another improvement and encourage strong forecasts for the next set of employment numbers. However, the Philadelphia Fed survey for December is expected to show a decline, with the activity index to fall to 16.4 from 16.7.
Some analyst warned that the data could well be skewed to the downside given that the latest Empire State survey Monday fell more sharply than anticipated. The two surveys are closely correlated.
Over the last week, economic data have become an even more important driving force for the dollar, with risk sentiment proving of secondary importance.
The latest FOMC statement on Wednesday helped to confirm this shift in market focus, when the dollar was boosted across the board by slightly more hawkish comments from the Fed, which raised expectations that the end of the central bank's ultra-loose crisis policy is approaching.
Although the Fed repeated that rates will be left unchanged for a "an extended period," the central bank confirmed it will start unwinding liquidity in February next year as previously planned.
The Fed statement came soon after Standard & Poor's downgraded its credit rating for Greek debt. The move had been widely expected after Fitch made a similar announcement weeks ago. However, the euro still sank as the whole issue once again became a hot market topic, with investors speculating over how Greece will resolve its debt problems.
See the following chart of the euro sinking
http://www.dowjoneswebservices.com/chart/view/3190
The pound also found itself being knocked sharply lower after new figures on U.K. retail sales showed a 0.3% fall last month. The market had been looking for a 0.6% rise.
By 1030 GMT, the dollar was up a little at Y89.91 from Y89.78 late on Wednesday in New York, according to EBS. The U.S. currency reached a high of Y90.27 before falling back.
The euro was down at $1.4365 from $1.4531 and at Y129.05 from Y130.45. The dollar was also up at CHF1.0487 from CHF1.0387.
The pound fell to $1.6113 form $1.6329.
-By Nicholas Hastings, Dow Jones Newswires"