12/11/2009

Retail Sales Improve

Stronger than expected retail sales data released Friday December 11th is the latest sign the US economy is improving at a faster pace than most analysts expected, up 1.3% in November after rising 1.1% in October, according to Reuters News.  Last Friday's better than expected monthly employment situation report sparked a 2.7% rally in the US dollar over the last week.  Combined with year end profit taking by commodity and hedge funds we could see a sharp move higher as the US dollar carry trade unwinds.  Commodities including precious metals, energies, stock indices and currencies have moved sharply higher against the dollar since it's peak in March 2009 and will likely see significant corrections if the US dollar continues to strengthen.  Exit long December Euro recommendation  from 1.4700 today. 

Dollar 

width=1Paul Kavanaugh
PFGBEST Research Team