The US GDP data for the 3rd quarter came in at 3.5% on Thursday which beat economist estimates by a full half a percent and sent the US Dollar to fresh monthly highs against the JPY. The GDP data Thursday certainly backs up the US Fed's decision to taper the last remaining $15 Billion Dollars of stimulus and gave traders once again a reason to speculate interest rates in the US are going to rise in the middle of 2015.
Lower Oil prices and strong consumer confidence is helping drive the US economy towards more normalised interest rates in the coming years but this will happen gradually. The interest rate increases may happen gradually but I doubt the rally on the US Dollar will be gradual, I suspect it will be stronger than many are thinking.
The Key Performance Indicators are all strong for the US economy. The US Fed is no longer printing money, the government is spending less money, jobs growth is much stronger than it was, inflation is slowing rising, growth is 3.5%, oil prices are low which is helping consumer spending and the stock market is not falling out of bed which is helping investors to feel richer. Overall its happy days ahead for now at least.
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