It will affect all these pairs - NU/USD EUR/USD GBP/USD USD/JPY AU/USD
The economy in the USA is doing great. lowest unemployment numbers in 17 years. Fed is slowly increasing rates. Even if inflation isnt moving up yet, Fed is still raising rates to have some ammunition for the next recession. Keep in mind inflation is a lagging indicator, by the time you start getting it whipping through the economy, its to late. Also, the first thing to show inflation isnt durable goods etc, its Assets. Large Assets in the US are inflating, houses are increasing in value at a strong pace.
The market has been bearish on the dollar for a long time dating back to march of 2017, even as far back as November of 2016. Market is bearish, fundamentals are strong. It doesnt add up. So it seems the pressure is building for the dollar to be bullish. Now throw in the technical analysis with a very nice bullish Bat on the WEEKLY chart with an RSI at 33. We are not there yet but we are getting very very close to a turn around in the dollar.
just one week more... a little bit under 95 (94,85), then up... with 1. TP 100.8
the same play with EURUSD... the new high in july - around 1.1530 (could be in the next week) and then down...
ljs411
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Bonvest, I have to agree with Dallas. Take a look at the trucking industry.. more freight than they can haul right now. (source: trucking.org/News_and_Information_Reports_Driver_Shortage.aspx ).. No drivers to haul it. The economy is hot. Frankly I think the dollar has weakened recently because of the current political climate trying to create jobs out of thin air. A lower dollar increases exports which increases employment. The problem with that kind of policy is that it is unsustainable. At this point we have machine shops staking out the local tech colleges willing to pay 50 dollars an hour to start. Shortage of skilled labor- Yes. shortage of jobs, not even close. A more hawkish monetary policy will come shortly to slow things down again, and will cause a sharp uptick in the dollar.
dallasgunns777
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@ljs411, I couoldnt agree more. Minneapolis just passed a 15 $ an hour minimum wage law. funny thing is because it is so hard to find entry level workers, all the business owners I know are already paying 15 an hour or close to it.
Bonavest
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I don't think the economy is doing great, but I can agree that the markets seem to be treating the USD with favor and I foresee some upside to the dollar as well.
dallasgunns777
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@Bonavest, How is it not doing great? Lowest unemployment in 17 years. Low unemployment increases wages... law of supply and demand. Stock market has been on fire. We dont want it over heated with inflation. Perfect spot, people are working and making money, investing, Just because Euroland is finally going to slow down or stop its stimulus, no comparison.
the same play with EURUSD... the new high in july - around 1.1530 (could be in the next week) and then down...