What a wild ride the Dollar is having!
Technically, so far, it's just a weak bounce off the (hopefully) floor at 88 but it's been a week of wild trading in US Dollars as first Treasury Secretary Steve Mnuchin talks the Dollar down (see "Record High Wednesday – Diving Dollar Boosts Equity Markets") and then his boss, Trump, completely negates what he says and promises a stronger Dollar.
You can see the very quick reaction we got yesterday but then traders remembered it was Donald Trump who promised a stronger Dollar – and it began to sell off again. Meanwhile, we're long on the Dollar (/DX) here as we think the Fed will indicate they are on a path to tighten further while Draghi and Abe continue to prevaricate. That's what currency values are all about – your currency relative to someone elses. The Dollar index itself is measured against a basket of other major currencies – there's no absolute value to the Dollar at all (kind of like BitCoin!).
We'll see what happens this morning as Trump is giving his Davos speech (8am, EST) and the theme is "America is Open For Business" touting our resurgent economy and, of course, low taxes and lack of regulations. In fact, just this morning, Trump named BPs lawyer and noted climate foe, Jeffery Clark to head up the DOJ's Environmental Unit and, as the linked article has to note – "No, this is not a headline from The Onion"). At least Clark has experience (though it's in destroying the environment, not protecting it).
To show how serious he is about trade, Trump's appointment for Deputy Chief of US Trade, G. Payne Griffin, just graduated American University in 2014 with a Bachelors Degree in Economics but, don't worry folks – he was an Eagle Scout, so things should be great. Hopefully he'll work out better than 24 year-old Drug Czar, Taylor Weyeneth, who just had to resign because he lied on his resume.
Speaking of the envrionment (enjoy it while it lasts!), Weather.com put together a fantastic article on climate change called "50 States, 50 Stories" which should be read by