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Is the dollar being tweeted down?

| Posted by: Paul Donovan | Tags: Paul Donovan

The markets were given an insight into the US administration's thinking on foreign exchange policy. The thinking appears to be confused, and perhaps muddled about real world economics. The central idea appears to be that the dollar should go down. The dollar is likely to go down, but as a result of policies not tweets.

The widening US current account deficit can be blamed on US fiscal policy this year. This, combined with foreigners being less keen to invest in the US, is likely to weaken the dollar further. Muddled policy may reduce investor confidence to invest in the US.

China's first quarter GDP came in exactly as expected. Investors are not exactly reeling with shock that the first quarter GDP came in exactly as expected. China is one of only two major economies that does not have an independent statistical agency (the other is Canada).

UK labor market data is due. To stress, again, average weekly earnings are not wages and do not pretend to be wages. The rise of self-employment in the UK makes it utterly irresponsible to pretend that the number has more than a passing acquaintance with household income. The German ZEW opinion poll of economists is also due.