Dollar limps into the long weekend
Markets will wind down in the next few hours and US trading will be sleepy for the remainder o the week due to the Thanksgiving holiday.
I'm inclined to dismiss the latest moves in the dollar today as flows and repositioning into the holiday. We won't know until next week.
What I keep going back to is the bond market. The flattener is getting all the attention but yields are the dominant force.
The story is that 10-year Treasuries haven't been able to break 2.40% after a short-lived foray last month. Now, a bit of a head-and-shoulders pattern is shaping up but the 2.30%-2.40% range is still the dominant storyline.
The takeaway? Confusion. There are plenty of reasons to like or dislike the dollar but my suspicion is that once it really starts to go, it will go far. If yields and USD/JPY both continue lower, there is plenty of room to run.
