US dollar off the lows
The stronger US personal income and spending data in July highlights the deep wallets of US consumers. The news helped to draw a line under the sinking dollar. It led to a small recovery even as trade data disappointed.
Looking ahead, we will be watching the London fix at 11 am ET (1500 GMT) very closely. We brought chatter about USD selling early in the week and that's what appears to be happening.
The risk here is tying the Fed to the move when that may not necessarily be the case. On the other hand, this move is with the trend and the dollar is breaking down, so you don't want to miss it.
Ultimately, I think there's an intraday trade here to continue selling the dollar but taking some profit at the fix.
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