The dollar continued to strengthen against the most of the major currencies during last week's trading session. The Dollar about 350 pips vs. the Euro, and the EUR/USD pair is currently trading near the 1.2300 level. The Dollar strengthened against the Yen as well.
The positive signals from the U.S. economy combined with the high-uncertainty regarding the Euro-Zone continue to boost the Dollar. The purchases of Existing Home Sales in the U.S. rose by 5.77M in April, beating expectations for a 5.62 rise. Another positive data of the U.S. housing sector showed that the sales of New Home have jumped to a two-year high in April. The New Home Sales report rose by 504K in April, beating expectations for a 425K rise as well. In addition, the recovery signals of the U.S. economy were fairly observed in the Consumer Confidence survey for May. The survey rose to 63.3 points, its highest level since March 2008. This reflects optimism among U.S. residents regarding their financial outlook. In the long-run, such optimism usually leads to an economic widening, and to an appreciation of the local currency.
As for the week ahead, many interesting publications are expected from the U.S. economy. However the report that tends to hold the greatest impact over the market is the U.S. Non-Farm Payrolls which is expected on Friday. The Non-Farm Payrolls is considered to be the leading employment data in the U.S. As a result its publication usually has an immense impact on the market and on the Dollar in particular. Traders should also follow the ADP forecast which is expected on Wednesday, as investors tend to adjust their positions according to this forecast.