This week witnessed a flurry of economic data, capped by tomorrow’s scheduled release of employment and GDP statistics. At the beginning of the week, the perennially pointless monthly durable goods statistics indicated a rise in durable goods orders, which Dollar bulls interpreted as a good sign. However, real estate data indicated a lower-than-expected rise in new home sales as well as a dramatic decline in the sale of existing homes. Polled economists are predicting that tomorrow’s news will likely fall into the dovish category, painting a picture of an economy that has already peaked and making the case for the Fed to hold interest rates at current levels. However, the bond markets are still pricing in 1-2 rate hikes over the near-term, which currency markets may use to prop up the Dollar. The Daily Reckoning reports:
Money supply growth has a negative impact on the dollar. Inflation is a currency killer, and looking at the broadest measure (M3), money supply growth is out of control.
Read More: Currency Markets Take a Rollercoaster Ride
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