The final reading on 2Q German GDP confirms economy is teetering on recession.

The U.S. dollar recovered from yesterday’s losses after a government report showed that the U.S. economy expanded faster than previously estimated.

Recent economic data points towards a weakening of real GDP growth in the euro zone economy and a more accommodative monetary policy could be needed to prevent the region from falling into a recession.

A severe U.S. dollar undervaluation is now likely to lead to a substantial improvement of the U.S. Balance of Payments through continued strong export performance.

The once resilient Euro-zone economy is slowly succumbing to the downward pressures of a strong euro, a slowing global economy and tight credit conditions.

The Bank of Japan left its key interest rate unchanged at 0.5%, but downgraded its view of the Japanese economy.

This week the Bank of Japan is widely expected to keep its key interest rate unchanged, which will keep the Japanese yen vulnerable against the US dollar on interest rate differentials.

In order to keep up with Inflation, Antonio Sousa expects the Fed to increase rates by almost 150 bps in the next 18 months.

What does it mean for the US dollar?

Antonio Sousa expects EUR/USD to trade below 1.45 in three months and USD/JPY above 120 in six months.