It would be difficult to imagine a worse scenario for the US dollar today — jobless claims, the Philly Fed and CPI numbers all pointed to continued QE.
The dollar is down since the numbers but it’s hardly anything dramatic, given the news you would expect it to be worse. When a market can shrug off news it’s one of the most powerful signals.
USD/JPY remains the most popular way to take advantage of US strength but there is a growing sense that USD/CHF could be the next trade. One of my favorite trades is to buy the re-test of a breakout and that’s what we’re seeing today.
Economic data tomorrow is light, so the trend higher could re-establish its footing. The main risk is from the stock market which is vulnerable to a correction.
