The US dollar has been climbing this week, after trading sideways in the previous few weeks. Yesterday, the dollar rose alongside interest rates as Federal Reserve Chair Yellen highlighted the need to raise rates, but not too gradually. The dollar also rose against safe havens, such as the yen and gold, after Trump publicly thanked China for reigning in North Korea. China has recently forced its banks to break off all banking relationships with North Korean businesses and individuals. Markets are eagerly waiting for the Trump administration to announce its plans for tax reforms later today.
USD/JPY managed to rise above 112 yesterday, and is trading this morning closer to 112.70. The euro continues to falter after the German election results were announced last week, with EUR/USD falling below 1.18. The exchange rate is currently closer to 1.1740 today. GBP/USD is also falling, with the exchange rate near 1.3370.
This week has quite a few announcements relating to US housing and the health of the economy. We've seen strong Case-Shiller house price data (meeting 5.8% growth expectations), but weak new home sales (-3.4% vs. 3.3% expected) and consumer confidence close to expectations (119.8 vs. 120 expected). On Wednesday, we'll see build permits, durable goods orders and pending home sales. Thursday will see the announcement of annual GDP and GDP deflator figures, along with initial jobless claims. Finally, on Friday we'll see year-on-year Core PCE figures - the Fed's preferred measure of inflation in the economy.