We’ve got competing trends unfolding simultaneously early this year as the reflation trade helps boost commodity currencies and weaken the yen while continued deceleration in the euro zone weighs on the single currency. The dollar is somewhat caught in the backwash at the moment, making for difficult intraday trading conditions. In the past, the reflation trade has been a drag on the dollar as its recent strength has come at times of maximum market panic.
Next up for the market is the ADP employment report. A loss of 435,000 private sector jobs is expected.
