Dollar ‘smile’ looks lopsided

THIS week’s steep dollar plunge may be more remarkable than it appears on first glance because the greenback has failed to respond positively to intensifying global political and market stress, suggesting a profound shift in market behaviour may be afoot.

One could argue that the dollar has simply been tracking US interest rate expectations and debt yields lower over the past week. Both have been spooked by warnings of a rare contraction of the once bulletproof US economy.