Dollar is set to to end the week as the strongest major currency as markets continue bet on faster rate hike by Fed next year. Fed fund futures are pricing in more than 75% chance of another hike by June. Dollar index broke through 103 handle overnight before retreating mildly. The greenback continue to receive support from surge US yields. 10 year yield reached as high as 2.621 before closing at 2.580. Stocks also regained ground with DJIA closed up 59.71 pts or 0.30%, at 29852.24. The index is still having 20000 in sight. S&P 500 and NASDAQ rose 0.39% and 0.37% respectively as consolidation extended. Meanwhile, gold is weighed down by Dollar strength and dipped to as low as 1124.3. WTI tested 50 handle and recovered to 51.2.
Dollar index's has resumed the long term up trend with this week's rally. Such up trend is expected to target 61.8% projection of 78.90 to 100.39 from 91.91 at 105.19 next. Based on current momentum, 105.19 shall be taken out rather easily early next year and should pave the way for 100% projection at 113.40 mid next year. We'll hold on to this view as long as 99.43 near term support holds.
On the data front, Eurozone will release trade balance in European session, as well as CPI final. UK will release CBI trends total orders. US will release housing starts and building permits. Canada will release international securities transactions.