Today's Market Focus - Rate Rumors Flying & Durable Goods data

After yesterday's strong rally, dollar remains firm into European session. Rate speculation has been flying around. Rumor of Bernanke's meeting with bond market participants on Wed fanned some speculation the Fed might hike rates by 50bsp next week. But this is likely over-reaction in a week without much economic data. But it is true that while a 25bps hike next week is a done deal, recent hawkish chorus from Fed is implying such tone will likely continue in the post meeting statement and odds of at least another hike remains high. Durable goods order will be in focus today. Economists expect the headline orders to rebound in May and increased 0.5%, together with ex transport orders which is expected to increase 0.6%.

Technically speaking, even though EUR/USD and USD/CHF are still held by near term support/resistance, break of corresponding levels in GBP/USD and USD/JPY is favoring the case that dollar's consolidation since last week has completed and further dollar strength should continue.