Reinforcement of imbalances and lack of saving in the United States is not dollar-friendly.
Investors got too excited about a near-term policy change. This is probably not the time to bet on yen strength. We need to add more fuel to the fire to get going.
But I am not sure (whether) the Australian dollar is a forward indicator or just a concurrent one.
The Australian dollar is relatively more sensitive to the global growth cycle -- not just commodities, but leverage to trade with Asia, especially China.
But it's nothing really fundamental: Is it interest rates backing up in the U.S.? Rate expectations backing up? Or the fact that the dollar fell too far too fast last week? It's probably a combination of all of that.
The Fed statement hasn't made me change my focus on data. I still think that those that will be important are those that give us a sense of capacity constraints and inflation.
Through the Q & A, we should get a sense of where he sees the balance of risks ... A lot of people think he is relatively more inclined to be more dovish. But if he comes across as very concerned about price stability, I think that could surprise expectations to some degree.
Market investors appear to be looking ahead to the end of the Fed tightening cycle and its implications for the dollar.
We saw a lot of dollar selling last week, so the dollar's regaining some lost territory.
The dollar is gradually moving out of its sweet spot. Once the Fed's tightening cycle is over, dollar bears are going to focus on the current-account deficit again.
