Confidence in the US Economy Keeps USD Bullish

The US dollar remained bullish vs. its main currency rivals yesterday, as a lack of global economic news resulted in very little movement in the marketplace. After hitting a fresh five-week high at 79.65, the USD/JPY saw a minor downward correction and spent most of the rest of the day at the 79.40 level. The USD/CHF advanced close to 60 pips during European trading, reaching as high as 0.9766 before reversing slightly toward the end of the day and stabilizing at 0.9740. Today, analysts are forecasting another slow day in the marketplace due to a lack of significant news events. That being said, any announcements out of the euro-zone regarding plans to combat the debt crisis in the region could result in significant fluctuations for the dollar. Later in the week, traders will want to remember to pay attention to the US Existing Home Sales and FOMC Meeting Minutes, both scheduled to be released on Wednesday. In particular, market volatility is expected following the meeting minutes, as there is speculation that the Fed could hint at a new round of quantitative easing in the near future.

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