Many traders have been caught by surprise by the extent of the dollar’s decline over the last week. The USD Index fell below 91 for the first time since January 2015, and Friday’s 0.96% drop, was the second biggest since January 2017. More surprisingly, the U.S. data released over the last week certainly doesn’t justify a dollar selloff.
The big news today is that the dollar’s losses have sharply accelerated but without any fresh news. The economic calendar is light and U.S. stock markets will be closed in observance of Martin Luther King Day. This hasn’t stopped the Dow futures from melting up another 140 points.
This is certainly shaping up to be another painful trading week for the Dollar. Bulls were nowhere to be found during Thursday’s trading session, despite the release of yesterday’s somewhat hawkish Federal Reserve minutes. While policymakers expressed optimism over the U.S. labor markets, and believe that tax cuts could stimulate consumer spending, concerns over low levels of inflation lingered throughout the meeting minutes.
Asian equities were mostly higher on Monday after Wall Street closed on record highs last Friday, as the U.S. Congress seemed very close to passing a final bill that will reduce corporate taxes from 35% to 21%.