Two US economic data points dropped at the same time in initial jobless claims and housing starts.
One was strong and one was weak but the US dollar ignored the soft housing numbers and rallied to fresh cycle highs against the Australian dollar and yen.
You could argue that jobless claims are a more-important indicator and it’s the best report in two months but it’s also a volatile series and last week’s report was at the worst level in six weeks.
It’s a similar sort of story to the Fed decision. It was mostly dovish with “considerable time” and “significant slack” remaining in the statement but the market focused on higher median forecasts for rates at the end of 2015 despite the Fed’s awful forecasting track record.
You can say what you want about the market but there’s no sense fighting it.
What’s clear from these numbers and the Fed is that traders are looking for any reason they can find to buy the US dollar — that’s a sign of a very strong bull market.
