Research Team at Westpac, have been running with the view that stronger US data should eventually manifest itself in a stronger US$ but while it is early days, that certainly seemed to be the case in last week’s crop of US data. Key Quotes “Of the 7 pieces of US data released last week captured by our US surprise index, 5 (or 71%) beat forecasts. That’s the best outcome we have seen back to July last year. Consistent with the above, the Atlanta Fed revised up its forecast for Q1 GDP growth to 2.7% on Friday, up from 2.5 percent on February 9. The US$ might also draw some support from Fed commentary this week noting global and market volatility concerns but also emphasising a “gradual” tightening path. This week’s rebound in the DXY should extend to at least 97.20. Event risk: The US data calendar is busy today with Jan CPI, and again next week, with Markit manufacturing PMI (Mon), Jan durable goods orders (Thu), personal income/spending (Fri), and the fi nalised Q4 GDP (Fri) holding most interest. Durable goods orders were extremely disappointing in Dec and the market is expecting a rebound. The PCE deflator (watched by the Fed) has risen slightly since mid-2015 to 1.4% and slight extension of that trend will be expected. Fed speakers include Williams, Bullard, Lockhart and Kaplan.” For more information, read our latest forex news.