At this time last year, people were talking a lot about the U.S. twin deficits and predicted the dollar would decline in 2005. They were wrong.

Worse-than-expected trade-deficit figures could be fertile ground for dollar selling. Amid the already dollar-bearish sentiment, the U.S. currency has a downside risk.

Combined with other economic data we’ve seen recently, it’s safe to say the Japanese economy is maintaining its upward trajectory.

Investors have been pouring money into dollar-denominated assets this year, where returns are higher.

Olson’s comments reaffirmed our views on the Fed’s stance for further interest-rate hikes. The Fed’s focus is on inflation. The dollar remains strong.

The dollar really needs very strong economic figures to get momentum. I can hardly see such strong data coming out, including TIC data.

The statement was a de facto acknowledgment that there is only a little room left for a further hike.