Once again the Dollar refreshed its recent high. The disappointing German IFO data further raised the expectation of new stimulus from ECB, while the stop loss orders from Euro buyers magnified the short term fluctuation. Euro Dollar slid to the day low of 1.2786, confirming our previous forecast of deeper fall from the Euro.
The US New Home Sales annual surprisingly grew by 504,000 houses in one year, which is the greatest high since 2008. The annual growth rate was 18% – a 22 year high. The strong sales number only further boosted the Dollar. The Dollar Index stands beyond the 85 level, which is another new high, not seen since June 2010. The Dollar has continued its rise to 10 consecutive weeks. It is the strongest bullishness of the Dollar in recent 30 years.
The strong Dollar also suppressed Gold prices to $1216 and erased most of Tuesday’s gain. We will maintain a bearish outlook unless gold bounces back to beyond the $1240 level.
The Aussie Dollar climbed to an area around 0.89. It is a critical level which may help traders decide whether the Aussie may start a significant rebound in the short run. As previously discussed, even though we expect that the Aussie may be heading to the 
0.8650-0.8500 range, but carry trade buyers may pop out any time and support the high-interest-rate currencies.
Asian stocks performed weakly yesterday with only the Chinese Stock market leading a rise. Shanghai Composite rebounded by 1.47% to 2344. The Nikkei Stock Average fell 0.24%. The Australian ASX 200 bounced 0.74% to 5376. European stock markets fell on a weak report on Europe’s economy, the UK FTSE was up 0.45%, the German DAX gained 0.70% and the French CAC Index rebounded 1.25%. U.S. stocks were boosted by the bright Housing data. The S&P 500 rose 0.78% to 1998. The Dow edged up 0.90% to 17210, while the Nasdaq Composite Index surged 1.03% to 4555.
On the data front, local traders should keep an eye on RBA Governor Stevens’ speech at 12:30 AEST. US Durable Goods Orders and Unemployment Claims will be released at 22:30.
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