The dollar is starting the holiday-shortened week lower with declines against all the major currencies. Primary weakness is vs. SEK (-1.30%) and NOK (-1.00%), and several sub-1% declines including -0.82% vs. KRW, -0.75% vs. NZD, -0.63% vs. AUD, -0.56% vs. ZAR, and -0.54% vs. CHF. The U.S. Dollar Index is -0.21% today and -0.70% over three consecutive days.
Data showing signs of economic cooling, including mixed signals on inflation, disappointing retail sales, and an all-time low in the University of Michigan’s gauge of consumer homebuying sentiment which dropped to 26, lower than the early 80’s when mortgage rates were near 18%.
The CFTC reported last week that asset managers have increased dollar short positions and are now net short for the first time in six weeks.
U.S. yields are lower in the near-term tenors and the 25-30yr tenors are unchanged. The 10-year yield is 4.452%. The decline in yields is driving investors into gold which is +0.44% today, its third consecutive daily gain.
Economic data this week includes today’s Consumer Confidence, Thursday’s Q1 GDP, and Friday’s Core PCE readings (the Fed’s favored gauge on consumer inflation).
