Thursday’s correction of USD strength developed quite independently of the data publications. Some traders clearly were not comfortable with EUR/USD levels below 1.05 and the data did not change that significantly. Of course, this does not point towards a trend reversal, not even towards a complete end of the USD rally. Because the prospect of a soft landing of the US economy was only questioned very marginally.

Because the market has bet so clearly on a soft landing, I assume that the USD exchange rates will react particularly sensitively to data that does not confirm this view.