Weekly EUR/USD

Yesterday's wholesale inflation figures put the Dollar under pressure on Tuesday, despite strong capital inflows in June ($75.1b). On logic seems to be that traders are most keenly focused on the Fed, possibly to the exception of all else, and soft inflation numbers imply a continuation of the "pause", and in time, a lowering of rates. Although the TIC data is usually a significant release, the adverse reaction to a big number tells us more about current sentiment than anything else. A general rule of trading is that when good news brings a bad result, matters are particularly worrisome. It can also be argued that in the middle of August, capital inflows from June are yesterday's news. Furthermore, as the Fed is the current focus, Wednesday's more significant core CPI stole the market's attention. Thus, the Dollar fell.
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