The Dollar rose significantly against the major currencies during last week's session. The Dollar corrected some of its losses from previous weeks, especially against the Euro and the Pound. The Dollar rose over 300 pips against the Euro and over 200 pips against the Pound, all in one week.

The Dollar's bullish trend came as a direct result of the positive data from the U.S. economy. Last week began with a superb, unexpected Long-Term Purchases publication. The Long-Term Purchases report measured the difference in value between foreign long-term securities purchased by U.S. citizens and securities purchased by foreigners during November. The end result rose from $19.3 billion in October to $126.8 billion in November, beating expectations for a $30.3biliion result. The stunning figure came due to a record bond purchases by private investors. This showed that foreign investors have deep faith in the U.S. economy, which of course strengthened the Dollar.
Throughout the week, additional positive economic data was published, showing that the Building Permits issued during December for new residential buildings reached above expectations, and that the Producer Price Index continues to rise as well. As long as the cheering data regarding the U.S. economy continues to flow in, the Dollar's bullish trend is likely to extend.

As for the coming week, the most intriguing economic publication from the U.S. will probably be the Federal Funds Rate on Wednesday. The Federal Funds Rate is in fact the Fed's Interest Rates announcement for the following month. Currently the Fed is likely to keep rates at their low level. However, if the Fed will surprise and hike rates, it could boost the Dollar to levels not seen in months.