Now that US dollar weakness has gone mainstream, time to buy?

Suddenly, stories about extended US dollar weakness are appearing. The main thesis is that the Fed won’t taper because of slower growth but that’s a canard. I think the Fed’s first taper will be to mitigate financial risks and send a signal about weaning the market off QE.

From there it’s all about growth. Look to ForexLive favorite Stephen Jen:

“The dollar needs confirmation that this economic divergence is indeed playing out,” Mr. Jen said. “We need to see better data in the U.S., and we need to see weak data in the rest of the world. If this thesis is undermined, then the dollar will struggle.”

Today the US dollar is the top performer. Tomorrow, the July retail sales report is released.