Buy the rumor, sell the fact. This is age old trading wisdom. It was also on display Friday when the unemployment figures were released. The thinking was that a strong employment number would push the Fed into an interest rate increase next week. This in turn would strengthen the U.S. dollar.
Well the number in new jobs reported was strong at 235,000 (expected number was 185,000). And the dollar promptly declined. It appeared that all the buying had already been done and now traders were taking profits. The decline of the dollar was moderate.
Going forward, the differential in interest rates between the U.S. (10 year yield= 2.58%) and Europe (Germany 10 year yield=0.48%) will favor U.S. debt. The only way to buy U.S. debt is with U.S. dollars. A Dutch investment officer for an insurance company who needs to invest for return over the next 10 years would probably be fired if they bought a German instrument rather than a U.S. instrument.
The technical trend of the U.S. dollar is higher. The fundamental situation alluded to in the previous paragraph is dollar bullish.