Currency traders accustomed to analyzing the Fed's dot plot and monthly U.S. jobs figures to divine the direction of the dollar are having to learn, or in some cases re-learn, a forgotten skill: how to scrutinize trade data.
It has been decades since investors gave significant thought to the data amid easing trade tensions. What's more, the flows represent a drop in the ocean for a currency market where about $5 trillion exchanges hands every day.
Yet now, with the dollar near a 14-year high and U.S. President Donald Trump accusing countries — Japan and China included — of keeping their currencies weak to gain trade advantages, the risk in any widening in the U.S. trade deficit may prompt a reaction from him and spur a dollar sell-off.