Modest rally in the US dollar eradicated.
The US dollar is down 30-40 pips right across the board after the worst reading on US consumer sentiment since October. The move wipes out dollar gains against the euro and pound. A small gain on the day remains against the yen and the commodity currencies remain solidly lower.
What is happening to the US economy?
Markets have been going with the ebb and flow of the data but economists have been steadfast that soft numbers were all a result of weather, port strikes, etc. Instead of adjusting as the numbers came in, they continued to double down.
To some extent, that's been the case with traders as well.
If there are a few more poor US economic indicators, economists (and traders) are going to throw in the towel. When do they do it? When the Fed does.
