Q3 U.S. Growth looking strong

Recent data has pointed to close to 5% growth for the U.S. economy. Retail sales (out this morning) are expected at 2.1% up from 1.7% last month. All this coupled with the hawkish statements by the Fed earlier this week continues to point toward higher U.S. rates.

But does this point to a higher dollar ? I am not sure of that one at this time. I am currently cautiously short dollars against the Euro and GBP. Hedge funds have definitly turned more negative on the dollar in recent weeks and it would not surprise me for us to hit 1.28 in the euro before making new lows.

Dollar Asia is a trickier animal. With oil at record highs is would point to a weaker Asia against the usd. This has not been the case. I am watching dollar Yen carfully a break below 110.00 (currently 110.40) and I will sell dollars looking for 108.00 quickly.

FXTRADINGIDEAS@AOL.COM