The DXY is forming a downward wedge. I expect once this breakout, it will mark the market top, notice the divergence between the SPX and DXY. Those jaws will close.
When you look outside the US the dollar is scarce. With the decrease in imports, the US is unable to export inflation.
The difference between the fed's printing power and the rest of the world's? The fed prints the currency that denominates our debt, so $1 USD = $1 USD always, regardless of buying power. Meanwhile, other countries print shaky currencies, while their debt continues to be denominated in USD. The dollar doesn't have to perform well, it just needs to perform better than everyone else and you'll see the dollar strengthen.
The EUR is already at negative rates, the US still has some runway before negative rates (it's a matter of when, not if).
Previous idea calling the meltdown:
When you look outside the US the dollar is scarce. With the decrease in imports, the US is unable to export inflation.
The difference between the fed's printing power and the rest of the world's? The fed prints the currency that denominates our debt, so $1 USD = $1 USD always, regardless of buying power. Meanwhile, other countries print shaky currencies, while their debt continues to be denominated in USD. The dollar doesn't have to perform well, it just needs to perform better than everyone else and you'll see the dollar strengthen.
The EUR is already at negative rates, the US still has some runway before negative rates (it's a matter of when, not if).
Previous idea calling the meltdown:
