There has been a lot of rhetoric lately about interest rates and the US dollar. One week rates are going to rise, so the dollar will strengthen. The next week data suggests that there is no need to raise rates and the dollar falls. I sit back and think how can macro-economic views shift with the wind week to week? It seems the US dollar has the same view. If you pull back to the big picture it seems confused and sitting on the sidelines.
The chart below shows the US Dollar Index since it started moving higher in July 2014. Notice anything in particular? Since the start of 2015, 15 months ago, it has moved in a range - a pretty tight 7% range. No real strength or weakness. Just a balanced valuation, waiting for something real to give it direction.
The US dollar is not listening to the hordes of pundits and economists that are predicting its moves. It is quietly sitting back and waiting for real evidence. At that point it will make its move. Not until. And not today. So tidy up your positions for the long weekend. If you celebrate Easter, like my family does, then have a great holiday. And for your own sanity follow the US dollar’s lead and shut out the noise.
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