Equity markets are back doing what investors and the media love, making record highs. Finally it was the Dow that lead US equities higher yesterday, with the index now back above the highs from earlier in the year.

At the same time, the USD was one of the weakest currencies of the day. There was news out that said China is looking to cut tariffs of their own and some have taken this to think they are looking to make a deal.

The commentary out of the last few days, suggests that many are now starting to think the Trump has taken the upper hand and that he is a far tougher adversary than many anticipated.

The main economic data today will be late from Canada, with CPI and Retail Sales. While out of Germany we have Manufacturing PMI.

The USD Outlook

The DXY has finally cracked the support level at 94.50. In a funny way, the USD has really moved the opposite direction to what I might have anticipated, throughout the entire tariff saga. It continues to be a bit of a head-scratcher at times, but like I keep saying, longer-term I am bullish on the dollar.

This round number level of 94.00 should provide some buying and there is a swing low just below this level.

However, if the buyers don’t step back up on Friday we have a fair bit of room to fall, which could be all the way down to 93.20. Which is a solid fall from where we’ve been.