I get the impression that at the moment the market is homing in on the Dollar. Anything that suggests that a recession is looming and that Fed Funds might soon fall again, seems to be taken as an opportunity to trade the USD weaker. That means that US economic data is more likely to entail downside potential for the Dollar, above all the PCE deflator on Thursday.

The Dollar might take another hit today if Consumer Confidence for November disappoints. If it records a surprise recovery, I see little chance of the Dollar recovering with EUR/-USD easing to 1.09, as in my view the risks are asymmetrical – to the Dollar’s disadvantage. Perhaps now is the time to test the 1.10 mark after all?