• 751 days Will The ECB Continue To Hike Rates?
  • 751 days Forbes: Aramco Remains Largest Company In The Middle East
  • 753 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,153 days Could Crypto Overtake Traditional Investment?
  • 1,158 days Americans Still Quitting Jobs At Record Pace
  • 1,160 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,163 days Is The Dollar Too Strong?
  • 1,163 days Big Tech Disappoints Investors on Earnings Calls
  • 1,164 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,166 days China Is Quietly Trying To Distance Itself From Russia
  • 1,166 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,170 days Crypto Investors Won Big In 2021
  • 1,170 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,171 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,173 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,174 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,177 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,178 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,178 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,180 days Are NFTs About To Take Over Gaming?
The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

  1. Home
  2. Markets
  3. Other

US Dollar

It seems nothing can stop the US Dollar. Since its low in April it has closed higher in four out of five months and is up almost 8.00% since then. While a run like that is in need of a rest there are some big issues that need to be considered now.

DXY broke out of a six-year triangle this month. Breaking to the upside from a triangle is bullish. That triangle is essentially a six-year base and should give DXY some serious "legs" for the future.

As the world's most important commodities are priced in US Dollars, a higher Dollar means lower commodity prices; deflation. Note in the chart below how both equities and commodities trended higher during the inflationary period associated with a falling Dollar. Note also the "Goldilocks" period while DXY has been forming its base. Even commodities, which took a big hit in 2008, have essentially gone sideways since then.

The Dollar breakout is warning of an end to the bull market in equities and renewed bear market in commodities.

S&P 500 Index Chart warns of Dollar breakout
Larger Image

 

Back to homepage

Leave a comment

Leave a comment