A little while ago we noted the absurdity that anyone could seriously ask whether China or the US was the worse currency manipulator. It’s China, and you can tell because their currency doesn’t move.
But what about QE and Fed printing!? Isn’t that currency manipulation.
That’s debatable, but what’s driving the dollar is global trade.
This chart, shown originally to us by Matt Busigin, shows the clear correlation between the dollar (represented by the redline, which is inversed) and the trade deficit. When the trade deficit is widening, the dollar weakens. When the trade deficit is narrowing, the dollar strengthens.