The US dollar was generally strong on Wednesday as Treasury prices plunged, sending yields higher.

But while the dumb money has its eyes on the stock market, the smart money is watching the economy.

The US dollar experienced sharp retracements on Tuesday, falling more than 1 percent against the majors.

Bill Bonner writes that the markets are clearly in a deflationary downturn.

Looking ahead to Tuesday, US wholesale inventories are forecasted to have contracted for the eighth straight month in April.

We are coming to a critical inflection point, perhaps the most critical point that we have had in 70 years for the US and to a great extent the global economy.

The US economic calendar promises far fewer top-tier releases in the days ahead, but what it lacks in quantity it compensates with substance.

The euro ended the week down against the US dollar, but the bulk of the pair’s decline occurred on Friday following the release of better-than-expected US non-farm payroll results.

It is no surprise that the Japanese yen has been on the short side of so many trades over the past few months.

How is it that the currency of an economy that is expected to suffer the worst economic contraction in the industrialized world, has ongoing troubles with credit and financial conditions, and is now seeing political turmoil has been able to produce such an impressive rally across the board?