What do the dollar bulls want?
US economic data today has been outstanding.
Third quarter GDP was at 3.2% compared to 3.0% expected. Of course there were some caveats but it was still the best quarter in two years.
At the same time, the future is looking brighter as Donald Trump makes America confident again. The November consumer confidence report -- the first since the election -- shot up to 107.1 from 101.5 with the 'present situation' index at the highest since 2007.
The numbers were as good as any US dollar bull could have hoped for.
And yet the dollar is now sinking. USD/JPY is down to 112.69 from 113.34 in the post-GDP glow. EUR/USD is up to 1.0620 from a low of 1.0564. The commodity currencies are jumping against the US dollar.
Why?
In some situations this would be a big red flag (and maybe it is) but I'm not sure it's quite the signal to bail on the US dollar that it looks like. For one, it's the second-last day of the month. That's a time on the calendar when the flows outweigh the fundamentals and everything else.
The real risk is that the market sours on Trump and that unwinds the dollar rally. Jim Cramer made a good point today when he said that Trump needs to tone it down on Twitter.
He's right but that's not the kind of thing a President should be worried about.
