Why a US dollar decline has turned into a rout.
The US dollar can only withstand so much bad news.
- It fell and then rebounded after a dismal non-farm payrolls number
- It fell and then rebounded after retail sales
- It ignored months of soft manufacturing data
But eventually it all adds up. The Fed is data-dependant and anyone depending on data to provide the reason for a rate hike is going to be waiting. In addition, one of the chief US economic supports for the US economy was soft oil but today oil rallied and is trading at the best levels of the year.
USD/CAD is helping the move along after the BOC as it falls below the January low to
1.2305 1.2284 as real money sellers arrive. USD/JPY is also below 119.00 and nearing some critical support levels.
US dollar 10 minute charts
None of this is fatal for the dollar but it will need some better economic news or higher CPI numbers on Friday.