Dollar Notches 8th Decline for Worst Stumble in Nearly 6 Years
The Dollar
keeps notching records…unflattering ones. With the Dow Jones FXCM Dollar
Index (ticker = USDollar) closing down another 15 points just above the
16,000-level, the benchmark has extended its slide to an eighth
straight trading session. This painful decline matches the worst
performance for the benchmark since July of 2007. That said, of the only six times in the Index’s history that it has posted bear waves of this consistency, this is the ‘weakest’.
Through this decline, the USDollar has shed only 102 points. This
compliments the deceleration of global equity indexes as their ‘rebound’
hits levels that venture into the outright ‘bull trend’ category. There
is a considerable difference between corrections and true trend – one
of conviction, momentum and potential follow through.
Risk trends
are the immediate concern for the greenback as the pressure is palpable.
Equity indexes across the globe have put in for flattering rebounds as
the ‘risk premium’ fed into the volatility measures (like the VIX) were
worked off. From traders, the ambitious speculative shorts disarmed
while the aggressive bulls bought the biggest dip in months.
Yet after
the Nikkei 225 retraced 38 percent of its January declines, the FTSE 100
covering 65 percent of its tumble and S&P 500 winning back 78 percent; the ‘low hanging fruit’ was picked.
To carry further, conviction needs to find a foothold. From the docket,
there is little ahead that touts the kind of sway to inspire new risk
positions or to force the deleveraging of existing exposure.
The most
media-friendly event - Fed Chair Janet Yellen’s scheduled testimony before the Senate Banking Committee - has been postponed
due to expected inclement weather. For Data, the January retail sales
figures on deck. However, these stats have limited scope when it comes
to altering broader risk trends.
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