The Dollar continued to rise on all fronts last week. The Dollar climbed about 300 pips against the Euro, as the EUR/USD pair dropped below the 1.460 level. The Dollar also strengthened against the Pound.
It seems that the main reason for the Dollar's bullish trend is the positive data coming out of the U.S economy. The U.S Trade Balance, which measures the difference in value between imported and exported goods and services during October, came in at -32.9B. This result was much better than predicted, and far better than September's result, -36.5B. This showed that the U.S export industry is beginning to recover, which strengthened the Dollar instantly. In addition, Retails Sales unexpectedly rose by 1.3% in November, beating expectations for a 0.6% rise. It seems that as long as positive figures continue to be published from the U.S economy, the Dollar will continue to soar.
Looking ahead to this week, the main news event is likely to be the Federal Funds Rate scheduled for Wednesday 19:15 GMT. The Federal Funds Rate is constitutes the U.S Interest Rates announcement for December. Current expectations are that the Federal Reserve (FED) will leave rates at the current level. However, if the Fed decides to surprise and hike rates, the potential exists for mayhem in the market.