Easy………. Equities Up Dollar Down, who cares what the stats are

It was yet another week where mixed statistics mattered little to forex markets as they continued the recent trend of following equity markets.In fact if things stay as they are all forex traders will need to complete a quick learning curve on what is driving stocks and act accordingly with the dollar. Of course this will all stop one day but right now that is certainly how the dollar seems to trade. So if the key is equities, where do they go? Well probably still range bound which is pretty useless information. However, there seems to have been a continued move out of stocks and into bonds. Double dip talk also continues so all in all shares have held up pretty well and certainly if all the gloom lifts a little a year end rally for stocks could happen with the US Dollar retreating in the other direction.
Elsewhere The Ausie dollar won the weekly strength award on better GDP ( Gross Domestic Product) numbers and building permits. At the other end of the scale Sterling faired worst. Following recent better data on growth the reality of up and coming austerity measures due in a few months have led to some institutions  to flag a weaker pound.

Finally a note about the weak parts of Europe. Firstly Ireland where a poll this weekend has 75% of people expecting that Allied Irish Bank losses will eventually bankrupt the country and bring down the government. For those who are interested this bank has already cost the country 22 Billion Euros and estimates are for a final figure of 35 billion or maybe even more.Those fears may well be overdone (although try telling  the bond markets that) but undoubtedly the Celtic Tiger has been well and truly stuffed.
Greece has been sidelined for a while but last weeks ban on smoking will not stop them from going up in smoke either. Don´t chuck away your packet of filterless Papastratos (Παπαστράτος) just yet, or your box of Hamlet cigars, for that matter.
All this is intended to remind you that we will get round 2 of a Euro wobble at some point and that could stop any dollar rout in its tracks, to be sure to be sure as they say.