The Eur-USD swung up through $1.30 today on stronger than expected economic data. This included a jump in French consumer spending that was 4x above estimates. Euro zone Industrial Orders also came in better than expected. Stronger eco data in Euro land raises the chances for another rate increases by the ECB,
Forex traders may have the $10 bln in OPEC dollar selling in the back of their minds.. but $10 bln in forex is a rounding error.. it's the message that the 4th largest holder of dollars is sending that may eventually have more of an impact along with China's statements this week that it wants to put its foreign reserves to better use.
And forgive me for being an unconvinced Washington watcher, but what umph does our President have and what difference will the State of the Union message make on dollar sentiment tonight, or much of any thing else tonight in the lives of the average person? Worse yet, the democratic response will show equal buffoonery on the other side of the aisle. There's no real plan within the beltway except for whatever gets them re elected. That is the common denominator that unifies the Presidential hopefuls from Hillary to McCain. Any one of them as winner in 2008 will be concerned most with how he/she gets re elected in 2012. Hillary's sound bite, "I'm in it, and I'm in it to win" had an awful lot of "I'm" in it and not much to inspire the voters. Which brings me back to the dollar.... long term bullish dollar sentiment given geopolitical events (namely the Middle East) and our own domestic problems doesn't seem wise.