One economic release that could possibly squelch some of the dollar longs’ momentum is today’s Personal Income data report. Last month the release showed a surprising decline of -0.10% and as some analysts so acutely pointed out, even Friday’s consensus beating GDP estimate of 3.8% revealed that disposable income actually fell at - 0.9% annual rate in Q3 of 2005. If Personal Income again disappoints this month, the market may discount last week’s positive results altogether as nothing more than pump priming by the US government which poured close $100 Billion in hurricane relief in the last two months. In order for the US economic growth thesis to hold, US Personal Income must show some meaningful gains. As we noted in our weekly commentary, if after the rate hike and the strong NFP’ s the dollar still can’t break the 1.2000 level, “the woes of dollar bull may be just beginning.”
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