Talking Points:
• With January's close, the Dollar has advanced for a record seven consecutive months
• The Fed's hawkish policy lean will keep the Greenback buoyant, but progress will be harder to come by
• A transition to risk trends and a dollar haven status can be a boon and burden
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With January's close, the Dollar has officially advanced for seven consecutive months. That is the longest bullish run on record. The drive by the currency has been well supported by a fateful shift in monetary policy that has found the Fed adamant of its path towards normalization at the same time its global counterparts have shifted towards rate cuts, stimulus programs and a more accommodative attitude. While this has proven a deep well of fundamental strength in the Dollar's surge to 11-year highs, further progress will be defined by how much more extreme the Fed's position will diverge from its counterparts. And, if we were to shift to risk trends, the Dollar may not pass untouched with the transition from 'rate hike candidate' to 'safe haven'. With a record in the books, we discuss in the weekend Strategy Video the outlook for the US Dollar over the coming weeks and months.
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