USD continues to retrace

Whilst the broader equity market saw a day of minor chop, there was notable significant weakness in the USD, which settled lower by -0.9% @ DXY 93.76 (intra low 93.50). The retrace from the March high of 100.71 now amounts to 7%, with a viable 3-4% still to go.


USD, weekly

USD, monthly'3, outlook

Summary

It is very notable that whilst the USD has now cooled a significant 7% since March, the US equity indexes have been broadly flat.

That does not bode well for the equity bulls, for when the USD starts clawing back upward (never mind >DXY 100), it will put major downward pressure on most US asset classes.

Eventually - and it remains one of my core longer term predictions, the DXY 120s look set to be hit. That would likely occur via a GREXIT, with €/$ 0.80s.


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Looking ahead

Thursday will see the usual weekly jobs, along with PPI data.
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Goodnight from London