USD Trading Outlook (21-10-2010)

U.S. Dollar Trading (USD) gave up gains from the previous day of trading post China&rsquo s surprise rate hike, as the majority of the market interpreted that the decision to increase rates for the first time since December 2007 was a precursor to positive GDP and CPI reading on Thursday at 0200 GMT. Market perception of positive global growth led by China, coincided with a rally in equities and commodities. In US Share markets, the Dow Jones rose 129.35 points (1.29%), S&amp P up 15.7 points (1.03%) and the NASDAQ also rose by 20.44 points (0.84%). In domestic news, the Beige book indicated that economic activity had expanded (albeit moderately), however growth in the work force was still being crimped by a soft economy. On Thursday, focus shifts to China data due during the Asian session with GDP, CPI, Retail Sales, and Industrial Production. In the US weekly jobless claims and Philly Fed are out.