Why the US dollar is so strong today

Stocks aren't doing much and the bond market is flat. If it was a fundamental story, you would expect to see some kind of reaction outside the currency.

Powell is speaking at Jackson Hole early on Saturday, that could set up a move in markets after the weekend but could this be front-running on hopes for something hawkish? That's tough to believe with other, smaller markets not reacting.

So flows? That's a bit of a cop-out but there's no great reason for so much USD buying today. The market is already heavily net-long dollars so specs probably aren't a big factor, but that can't be ruled out because it's a less-liquid time.

Elsewhere, there are reasons to sell other currencies. The Australian dollar is getting hit by political trouble and a potential spat with China over 5G technology. Cable is always vulnerable to Brexit headlines, although there isn't anything damaging today.

Emerging market currencies are a good bet to be part of the problem. The South African rand is down 1% on Trump's tweet with every other EM currency also lower with the exception of Argentina's peso.

So on net, it's still a mystery. That could mean China is at work or some other central bank is buying dollars and that's what I guess is underway. The thing is, that's not going to be sustainable so I'm not sure this round of dollar buying will last.

Read more:

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• The only expiring FX options today are for GBP/USD and they are in a small size
• Jeffrey Gundlach: “USD’s next move is going to be down”
• What’s ahead for the Australian dollar for the next year
• B.J.’s new Brexit strategy wasn’t approved by the Pound