In June we wrote, "The weather may be getting hot but the economy is cooling and unless US growth picks up dollar?s gains are likely to be capped. " The gains were not only capped but disappeared altogether as the greenback once again plumbed the depths of its lows. The culprit was once again the consumer. While producers registered impressive gains as evidenced by healthy increases in both ISMs, the US consumer continued to struggle faced with mounting debt service and little prospect of income growth. It?s a deadly combination and if there is no respite in sight, the greenback could see further weakness in months ahead.
Boris Schlossberg
Senior Strategist
