The dollar opened the month of August at 1.2766 against the euro and closed it at 1.2812, a whopping 46 basis points higher. As we note elsewhere, if you went to sleep for whole month you would have missed nothing. With the dog days of summer over, however, volatility is likely to return to the currency markets. The key question is: which way? While the bear arguments for the dollar are well known, consider this oil has fallen below $70/bbl. And the hurricane season has been tame so far. If crude slides towards $60/bbl, it acts as a massive tax cut for the general population just in time for the Christmas shopping season. Could this be the soft landing that no one expects?
Boris Schlossberg
Senior Currency Strategist
[email protected]
Terri Belkas
Junior Currency Analyst
[email protected]
