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We had adopted a working hypothesis that after recording lows in early July, the greenback was going to retrace the last leg down that began around June 23. That appeared to run its course around July 17. We
Week Ahead: Supportive Dollar Technicals Vs. Possible Dovish Hold By FOMC And Slower Jobs Growth
Summary
- We had adopted a working hypothesis that after recording lows in early July, the greenback was going to retrace the last leg down that began around June 23.
- We correctly anticipated the bounce in the Dollar Index in the first half of July and caught the recent pullback.
- The key driver of the yuan's exchange rate is the broad direction of the dollar.
- Sterling remains sensitive to the broad direction of the dollar. The rolling 30-day correlation between changes in sterling and the Dollar Index is around -0.75.
Marc Chandler has been covering the global capital markets in one fashion or another for 25 years, working at economic consulting firms and global investment banks. A prolific writer and speaker he appears regularly on CNBC and has spoken for the Foreign Policy Association. In addition to being quoted in the financial press daily, Chandler has been published in the Financial Times, Foreign Affairs, and the Washington Post. In 2009 Chandler was named a Business Visionary by Forbes. Marc's commentary can be found at his blog (www.marctomarket.com) and twitter www.twitter.com/marcmakingsense