Rumours surrounded this week going from shrinking Chinese appetite of U.S. bonds to speculation that the United States would pull out of NAFTA and while real economic indicators on Friday showed stronger U.S. inflation and retail sales it did little for the struggling US dollar. Economic growth outside of the US is accelerating and monetary policy is expected to tighten more abroad putting pressure on the greenback.
At the time of this writing, the U.S. dollar was still down against most major currencies. The greenback fell on the back of an earlier report from Bloomberg – citing people familiar with the matter – that China is considering reducing or halting its purchase of U.S. government debt.
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.