Forget the quaint notion that good economic data should be good for a currency…that’s so 2007.
For the last two-plus years, we’ve been all about risk. What did the dollar do as the global banking-system quaked over the sub-prime crisis? It rallied like a freight train. We’ve been pretty much trading risk ever since, with the dollar the safe-haven and commodity currencies the alternative when risk recedes.
We are now in the midst of a sea-change with the market casting aside fears of a second US recession. Against that backdrop, a weaker dollar looks like the way the market will play, logical or not.
