DXY Dollar trade-weighted cycles tend to last on average 8 years
* There are many indicators that tell us interest rates are too low * There is no precedented history to have rates at zero. I think we are really behaving in a way which is outside of historical norms and that should make us nervous * Given the unemployment rate, and even given low inflation, we are below where we would normally be * US inflation below target but not that far below target * The dollar is not our responsibility * Could be some reverberations from stronger dollar, but should be relatively small * We should not respond to every wiggle of financial markets * Don't think buying assets is the solution to creating more inflation * Challenges for both euro zone and japan to lift inflation
Also, the dollar is inversely correlated to oil ( - 92 % apprx) when the dollar rallies, we can expect lower oil rpices, perhaps $60 , even $ 50 a barrel is not too far fetch
charttrader
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Yep, really good point BTW
QuantitativeExhaustion
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Nice call Algo Kid
cooney_s
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$1,039 keeps coming up as a Gold target for me. USD has huge upside potential...91.oo handle by February. I have USOIL hitting $73.60 pretty easily, then we can probably discuss $58.89. Sounds crazy, but looks possible.
cooney_s
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yes, contrary to hype of dollar losing its status, US$ will go parabolic. US$ will be strengthening while other Majors will be diluting themselves more.
charttrader
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IS this only beginning of the cycle in the dollar appreciation?
Algokid
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Yep, with ECB and Bank of Japan starting their own "QE" program, the USD will definitely get stronger
admin
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Good point.
elp
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Agree the dollar is in an uptrend, however using exact lows and highs, imho the dollar could witness a long term top similar to 1985 & 2001 in 2017 ? Although it could be a process like 2000-2002 making a tripple top? It's all to tbd. TY for posting great charts!
alex.a
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Let Treasury stuff come along with for USD to go higher ~