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Dollar Drivers
The bull case for the US dollar rests on two legs. The first is that the policy response to the crisis has produced superior economic results in the US that would lead to the Fed raising rates later this year. The second was the ongoing challenges faced by Europe and Japan. For several months both legs had strengthened. A combination of factors has frayed the consensus about the trajectory of Fed policy and the strength of the US economy. Weakness in retail sales and the decline in hourly earnings helped swing the pendulum of market sentiment. The FOMC statement, which added a new concern about international ... (full story)