The dollar and the yen, the two strongest currencies of the trading session last week, is likely to be shaken this week, interest rate announcement from the U.S. and Japan is expected. Any handling fees for either is likely to have a massive impact on the market. This could provide a unique opportunity for high profits, and traders should use this week's extraordinary to increase profits.
The dollar rose significantly against major currencies during the session last week. The dollar corrected some of their losses from previous weeks, especially against the euro and the pound sterling. The dollar rose over 300 pips against the euro and more than 200 pips against the pound sterling, all in one week.
Upward trend of the dollar was the direct result of the positive data from the U.S. economy. Last week began with a magnificent and unexpected long-term publication purchases. The long-term purchasing the report measures the difference in value between the long-term foreign companies acquired by U.S. citizens and securities purchased by foreigners during the month of November. The end result was increased from $ 19.3 billion in October to $ 126.8 billion in November, exceeding expectations of a result 30.3biliion $. The figure was impressive due to a purchase record of bonds to private investors. This showed that foreign investors have deep faith in the U.S. economy, which of course strengthen the dollar.
Throughout the week, some positive economic data was published, showing that building permits issued in December of new residential buildings reached above expectations, and that the Producer Price Index continues to rise as well. As long as encouraging data regarding the U.S. economy still flowing, the upward trend of the dollar is likely to spread.
As for next week, the most intriguing economic publication of the U.S. will probably be the federal funds rate on Wednesday. The federal funds rate is actually Federal Reserve interest rates announced for next month. Currently, the Fed likely to keep rates at its low level. However, if the Fed will surprise and raise rates, which could boost the dollar to levels not seen in months.