The economic calendar is light in the day ahead
The dollar rally in the past week has been all about data, starting with an upbeat housing starts report and continuing with durable goods orders today.
There won't be any fresh fuel for the fire in the day ahead -- the US economic calendar is bare until initial jobless claims on Thursday. At 20:10 ET today, the Fed's Lacker speaks but he's predictably hawkish and there is little I could envision him saying to get the market moving.
Markets will have a chance to digest today's moves
I suspect we will see a continuation in stock market declines as traders get a bit jittery after a reversal at the highs. FX is a tougher call but I also believe some follow-through is the most likely scenario. If there is a pullback, I expect strong USD/JPY demand at 122.00.
The bottom line is that the Fed is hawkish and US economic data has been better after a long slump. This looks like the start of something good for the dollar bulls. Even a flat day tomorrow is good news.
