Maybe nothing

Before Brad Setzer went offline to work for the National Economic Council - he had been writing for the CFR on money flow issues - he had talked about a decreasing window of vulnerability for the US dollar. Specifically, he'd been noting that as the US trade deficit fell - and it had been following, earlier this year - the need for foreign governments to sterilise US dollar holdings had declined in tandem, reducing the amount of total deficits needing coverage through bond purchases. He'd expected this trend to continue, helping reduce a vulnerability to, say, China dumping US dollars.

July says not so much. The US trade gap jumped 16.3% in July - 18.3% excluding oil products. (The article says "petroleum" but I think they mean all oil, because that's the usual exclusion here.) That's the biggest jump since 1999.

Fortunately, one month doesn't make a trend. Watch for August's trade numbers next month. See whether this continues.