The second full week in August was a good one for the U.S. dollar. The greenback extended its gains against most of the major currencies but the rally is slowing as investors cover their shorts in EUR/USD, AUD/USD and other major currencies. Softer than expected U.S. consumer confidence helped to fuel their recoveries but the prospect of 2 relatively quiet data weeks and the potential for a disruptive trade meeting between the U.S. and China also encouraged investors to reduce their short positions. The most important event risk next week will be the U.S. and China’s trade talks on August 21 and 22. If the talks go ... (full story)