US Dollar: A Return To Weakness?

This week’s fundamentals were obviously skewed by the FOMC on Wednesday but here are the US dollar positives and negatives for September 16th – 20th.

US Dollar Positives

USD – ! – Unemployment Claims 309K vs 331K
USD – !!! – Existing Home Sales 5.48M vs 5.27M
USD – !!!! – Philly Fed Manufacturing Index 22.3 vs 10.2
USD – ! – TIC Long-Term Purchases 31.1B vs -45.3B
EUR – !! – Current Account 16.9B vs 18.3B
GBP – !! – PPI Input -0.2% vs 0.3%
GBP – !!! – Retail Sales m/m -0.9% vs 0.4%
CAD – ! – CPI 0.0% vs 0.1%
GBP – !!! – MPC Asset Purchase Facility Votes 0-0-9 vs 0-0-9
GBP – !! – MPC Official Bank Rate Votes 0-0-9 vs 0-0-9
USD – !!! – FOMC Member Bullard “…Economy not THAT fragile” and “…No taper or small taper was a borderline call”

Total = 25!

US Dollar Negatives

USD – !!!! – FOMC Statement No Taper
USD – !!!! – FOMC Press Conference
USD – !!!! – FOMC Economic Projections VERY Dovish
USD – !!! – Empire State Manufacturing Index 6.3 vs 9.2
USD – !!! – Industrial Production 0.4% vs 0.5%
USD – !! – CPI 0.1% vs 0.2%
USD – !! – NAHB Housing Market Index 58 vs 59
USD – !!! – Building Permits 0.92M vs 0.95M
USD – !! – Housing Starts 0.89M vs 0.93M
USD – !! – Current Account -99B vs -96B
EUR – !!! – German ZEW Economic Sentiment 49.6 vs 45.3
EUR – !! – ZEW Economic Sentiment 58.6 vs 47.2
GBP – !! – RPI 3.3% vs 3.2%
GBP – ! – Public Sector Net Borrowing 11.5B vs 11.9B
GBP – ! – CBI Industrial Order Expectations 9 vs 2
CAD – ! – Foreign Securities Purchases 6.09B vs -2.23B
CAD – ! – Wholesale Sales 1.5% vs 1.1%
CAD – ! – Manufacturing Sales 1.7% vs 0.6%
CAD – ! – Core CPI 0.2% vs 0.1%
EUR – !! – ECB President Draghi Speaks Dovish)
AUD – !! – Monetary Policy Meeting Minutes Less Hawkish
AUD – !! – RBA Assist Gov Edey Speaks Less Hawkish
JPY – !! – BOJ Gov Kuroda Speaks Dovish

Total = 50!

What Does This All Mean?

This means that with the US dollar currently oversold and retracing higher, extreme caution should be taken when trading dollar long positions. US Philly Fed and home sales data have provided a push higher away from oversold conditions but as soon as these oversold conditions have reduced, we may see a return to FOMC and fundamentals led US dollar weakness