Small update on the US Dollar Index. Not to say we are out of the woods here, but its nice to see the DXY drop a few % over the past week. There are a few factors driving this but it remains to be seen if it is a brief retracement on the way up, or a more sustained downtrend.
Historically this range rejects DXY (it has on several occasions in recent decades), leading to a more sustained downtrend. But these are unusual times and the US Government hasn't given a clear indication whether it can throttle back it's policy/positions that drove the DXY rally in the first place, such as how many more and how aggressive further rate increases will be.
We should also be watching the Euro Zone and whether the Central Bank proceeds with a rate increase in July, since that can impact the Dollar as well. As of yet it hasn't presented a profound impact on equities or crypto markets, but the DXY weakness is giving a little relief to investors over the past week.
Historically this range rejects DXY (it has on several occasions in recent decades), leading to a more sustained downtrend. But these are unusual times and the US Government hasn't given a clear indication whether it can throttle back it's policy/positions that drove the DXY rally in the first place, such as how many more and how aggressive further rate increases will be.
We should also be watching the Euro Zone and whether the Central Bank proceeds with a rate increase in July, since that can impact the Dollar as well. As of yet it hasn't presented a profound impact on equities or crypto markets, but the DXY weakness is giving a little relief to investors over the past week.