Strong US news bolsters the dollar

Better US data caused a brief flurry of weakness in stocks, while the dollar continues its recovery, says Chris Beauchamp, Chief Market Analyst at investing and trading platform IG.

Stronger US data sparks selloff

Investors are bound to be nervous in this period of all-time highs for US stocks, weak seasonal trends and following a speech by Powell that has caused some of the post-Fed dovishness to be wound back. Today’s revised GDP data, claims and durable goods provided a triple-whammy of better news that prompted stocks to head lower, though dip buyers soon appeared. Of course, a sustained pullback over the next two or three weeks would doubtless be welcomed by many, but markets are rarely so obliging.

Dollar squeeze continues

Dollar bulls have had a good couple of weeks, and today’s data has helped the greenback to leap once again. It has really been a question of when, not if, the dollar would stage a rebound, and a further run of good US data might see a sustainable low emerge for the currency.