US dollar skids to the lows of the day
The US dollar just can't get a break. Inflation has been the thorn in its side all year long. An interesting question, is what would inflation be if the US dollar hadn't fallen 10% this year?
The Fed wants to blame one-time items like cell phone costs but it's been five years of inflation missing estimates. That's a lot of one-off items.
The dollar is unimpressed. It got some momentum when Irma mostly missed Florida, then Congress passed the debt ceiling without any problems, the Fed was more-hawkish than expected and then Republicans rolled out a huge tax break.
The US dollar is higher this week but it's nothing to get excited about. USD/JPY rose to a two-month high of 113.26 on Wednesday but has faded back to 112.27, up only fractionally on the week.
The Fed is talking again about its confidence in a return to 2% inflation, but that line has turned into a bit of a joke.
I also get the sense that the market is losing faith that Yellen is coming back and that Trump will appoint someone (or a few people) who are willing to tinker.
Or maybe it's just month-end and the dollar will get back in gear on Monday.
