The Dollar

This, in addition to the fall of the dollar this week, could have some impact on the Fed’s planned $100 billion sale of cash-management bills.  From the WSJ,

Foreigners sold a net $60.9 billion in long-dated U.S. securities in January, after buying $24.3 billion in December. Including changes in banks’ dollar holdings, short-term securities and nonmarket transactions, net foreign capital outflows totaled a record $148.9 billion in January, compared with $86.2 billion in inflows in the previous month.

Michael Woolfolk, senior currency strategist at the Bank of New York Mellon Corp., said the big outflows are a concern and could represent a trend away from the flight to quality that has boosted purchases in U.S. assets in recent months.

“This was a truly awful report, throwing into question the funding of the U.S. current-account deficit,” he said in a statement.

This might be where the rubber meets the road, so to speak.

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