The U.S. dollar on Thursday was on course for a fourth-straight losing session as worries over twin deficits in the United States mounted amid a government spending splurge and large corporate tax cuts. The dollar is trading near 3-year lows. The greenback jumped on Wednesday after the CPI reading showed U.S. inflation was stronger than expected for the month of January, boosting expectations that the Federal Reserve could increase interest rates as many as four times this year. Meanwhile, it was also accompanied by an unexpected drop in U.S. retail sales. Nevertheless, investors will still watch for signs of a sustainable rise in consumer prices. But it quickly turned lower, eventually continued loses for 6-Days in a row against a basket of major currencies. The dollar added to those losses on Thursday, with the index hitting a two-week low of 88.585. The U.S. national debt recently topped $20 trillion, while the 2019 fiscal deficit is projected at near $1 trillion, including deficit-financed tax cuts and two-year spending caps that Congress passed last week. As inflation is picking up in almost all developing countries, European Central Bank, Bank of England & Bank of Japan move closer to tightening their policies, bund, gilt & JGB yields will rise faster than Treasuries, making the Euro, Sterling and Yen more attractive than the US Dollar. Major data on the deck regarding the USD is the building permits at 13:30 a.m. GMT, with economists forecast to be 1.29 million building permits were issued by the government in the month of January.
Currency War is Back
Daily Analysis - 16/02/2018