Only bad news impacts the dollar. That’s one way of knowing we’re in a strong trend. The news that supports the trend is absorbed while the news that counters the trend is ignored.
The latest sign of this phenomenon is the decline in US bond yields today, suggesting jitters over foreign funding of the US debt have subsided somewhat. The greenback has experienced no appreciable recovery despite this shift in bond market sentiment.
It is interesting to note that yields have fallen about 20 bp since Bill Gross professed his renewed appetite for Treasuries at above 3.70%. They reached about 3.76% yesterday before beginning their recovery in price, fall in yield. We are now at 3.46%
EUR/USD is consolidating quietly in the 1.4120 area. Cable has taken on a modestly softer tone this afternoon after reaching 1.6200 at midday. It trades now at 1.6130.
