Talking Points:
• USDollar has climbed for five consecutive months and scaled five-and-a-half year highs
• A massive depreciation of its primary counterparts and steady view for the Fed has fed much of the move
• Moving forward, the same catalysts could turn into anchors; necessitating an untapped support
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Five consecutive months of climb for the USDollar have pushed the benchmark currency 11 percent higher and to levels last seen in early 2009. The motivation for this move has proven solid between a vast depreciation of its major counterparts (Euro and Yen), a stubbornly 'hawkish' lean from the Fed and a rise in uncertainty that is emerging at the fringes. To this point, this mix has been working in conjuction to reinforce bulls' expectations; but the responsibility has been disproportional. Economic stagnation and a shift to exceptionally accommodative monetary policy for Europe and Japan are the source of much of the Greenback's momentum. How much further can this theme ramp the Dollar? Are the Fed's forecasts capable of picking up the slack? What happens should the reach for yield continue or collapse? We consider the Dolllar's medium-term outlook in the weekend Strategy Video.
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