The move higher on the dollar has continued today as the markets continue to price for higher US growth and inflation of a Trump presidency. The strong dollar has been exacerbated by the early jump in Treasury yields (the bond market was shut Friday for Veteran’s Day), with the 10 year yield now over 2.2% and the highest since January. Also the highest since January is the Trade Weighted US dollar which is again close to 100. These moves are impacting across major forex pairs with EUR/USD back to Q1 levels and Dollar/Yen moving above a the key technical resistance at 107.47. The stronger dollar is also pulling gold back below the key October support and the bears will now be eyeing the $1200 level once more. Economic data out of Asia has been mixed this morning, with Japanese GDP better than expected at an annualised +2.2%, but China Industrial Production (+6.1%) and Retail Sales (+10.0%) both missed expectations.
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