Excited US dollar advances before tonight's economic data release

Things look promising for the US economy with consumer confidence returning to levels before the GFC. Yesterday, the U.S. CB Consumer Confidence Index hit highs not seen since October 2007. The data was 90.9 against a forecasted 85.5 and a previous 86.4. The Dollar was inspired and was stronger across the board after the release.

Gold prices crashed through the $1300 integer level, suggesting weakness may continue even though there are no signs of relief from either the Ukraine or Gaza.

The Kiwi Dollar pared to 0.85 yesterday with news from major New Zealand dairy producer Fonterra with expectations that milk prices will fall in the near future. Looking at it technically, the exchange level has moved to its former support level, and will probably test June’s low at 0.84 and the upward trendline started from August 2013. However, the fundamental condition is in the New Zealand Dollar’s favour. The highest interest rate in the developed world will certainly attract more funds to purchase at its low level.

UK’s Mortgage Approvals surprisingly increased to a four-month high. Yet the data still did not improve the weakness of the sterling. The Pound/Dollar broke support of a 50-day MA right after it hit the day’s high at 1.6994. Since this July, upbeat data like CPI, unemployment rate and GDP all failed to push sterling to a newer high against the Dollar. It is reasonable to speculate the bullish trend of Pound will ease in the short term.

Asian stocks moved higher, as earnings reports in Japan and Australia were better than expected. The Shanghai Composite rose 0.24% to 2183 whilst the Nikkei Stock Average gained 0.57% and the ASX 200 advanced 0.20% to 5588. In the European stock markets, the FTSE closed 0.29% higher, the DAX rose 0.58%, and the French CAC advanced 0.48%. The U.S. closed slightly lower whilst the U.S. and EU makes decisions to adopt a new round of sanctions on Russia. The Dows lost 0.42% to 16912. The S&P 500 edged 0.45% lower to 1970, while the Nasdaq Composite Index was down 0.05% to 4443.

The all-important U.S. data is coming tonight. ADP Non-Farm Employment Change will be released at 22:15 AEST. GDP will follow 15 minutes after and the FOMC Statement will be out at 04:00 tomorrow morning.