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U.S. Dollar

Aug 05 2023

U.S. Dollar—Still The Cleanest Dirty Shirt

  • Aug 5, 2023

The U.S. dollar broke below its recent support; its weakness has been a dominant driver of risky assets and its direction will be an important determinant of the current rally.

Nov 21 2022

Tactical Tools For A Stronger Dollar

  • Nov 21, 2022

The 2022 bear market has been driven by collapsing valuation multiples, particularly for expensive growth stocks and unprofitable companies. Coming into the year, U.S. stocks stood as one of the most egregiously valued equity markets around the world, motivating investors to look elsewhere for more reasonably priced alternatives. Fortunately, international stock markets offered much better valuations that could serve as havens from the coming U.S. valuation collapse. Unfortunately, the strategy of seeking refuge in moderately priced foreign markets was foiled by an unusually strong U.S. dollar, leading us to take a closer look at how moves in the USD affect investment outcomes for domestic investors.

Nov 04 2022

Research Preview: Returns In A Year Of Dollar Strength

  • Nov 4, 2022

The U.S. Dollar Index (DXY) has gained 16.2% YTD, its best performance in almost 40 years. However, a strong dollar is bad for those with international investments, as returns are slashed when translated back into dollars. 

May 06 2022

U.S. Dollar—Drivers & Impacts

  • May 6, 2022

Most U.S. dollar drivers point to a stronger dollar: attractiveness of U.S. assets; policy differentials; real interest-rate differentials; terms of trade; weaker Yuan; and capital flows/hedging activity. Speculative positioning, however, is a negative and suggests the dollar rally might at least take a pause in the near term.

Oct 07 2021

Gold: Still A Useful Dollar Hedge

  • Oct 7, 2021

A stronger U.S. dollar is “supposed” to be bearish for commodities, but it’s been a banner year for most commodities with gold among the few that are down on the year. However, keep in mind that gold tends to be a harbinger of major moves in industrial commodities, with a lead time of about six months—and its year-over-year change is now negative.

Jun 25 2021

Visualizing U.S. Stock Market Dominance

  • Jun 25, 2021

It’s near the year’s mid-point and U.S. equities are doing what they’ve done nearly every year since the onset of the Great Financial Crisis: trouncing their foreign counterparts. The S&P 500’s YTD gain of 13.5% is about 500 basis points better than EAFE’s, and 800 basis points above that of the MSCI Emerging Markets Index.

Apr 08 2021

U.S. Dollar—A 2018 Redux?

  • Apr 8, 2021

The price action in the DXY Index over the last year shows an uncanny resemblance to the 2017-18 period, both in duration and magnitude. Overall, we believe the dollar could strengthen in the near term, but the longer-term bearish trend remains intact.

Jun 12 2020

Keep An Eye On What Your Stocks Will Buy

  • Jun 12, 2020

News that the Bureau of Labor Statistics may have undercounted the May unemployment rate by six percentage points should remind investors of the danger of taking government economic reports too seriously. Regardless of the figure, though, unemployment is no doubt near its peak for the downturn.

Dec 06 2019

No Place Like Home For The 2010s

  • Dec 6, 2019

We thought we’d get a jump on all the “End of the 2010s” retrospectives you’re sure to see next month. Though not quite yet the official end of the decade, the changing of the “tens” digit definitely has a certain gravitas to it.

Aug 30 2019

Is A Strengthening Dollar A Form Of Policy Tightening?

  • Aug 30, 2019

Executive summary (for those leaving early for the holiday weekend): No.

We’ve found no reliable relationship between swings in the U.S. Dollar and subsequent variations in U.S. economic growth.

Apr 26 2019

Oil And The Dollar At New Highs: Is Something About To Give?

  • Apr 26, 2019

Crude oil and the U.S. Dollar Index accomplished a relatively rare feat by moving to simultaneous six-month highs earlier this week (Chart 1).

Apr 05 2019

1999 Redux

  • Apr 5, 2019

As the market rebound has extended, we’ve noted its striking similarities with the rally of 1999—one that might have been the most speculative in U.S. history.

Mar 07 2018

1987 Parallels (Part 2)

  • Mar 7, 2018

At the risk of yelling “fire” in a crowded theater, we present a few parallels between recent action and the year leading up to the October 1987 crash.

Aug 05 2017

A Crude Catalyst?

  • Aug 5, 2017

The great mystery behind the trade-weighted dollar’s nearly-10% YTD decline is that it’s failed to fuel further gains (or any gains) in commodity prices in 2017.

Mar 06 2017

Grappling With A Strong U.S. Dollar Outlook

  • Mar 6, 2017

Profitable investing overseas requires not one, but two, successful decisions: 1) select an outperforming asset class; and, 2) be in a currency that provides a favorable foreign exchange impact.

Jan 27 2017

Global Configuration Of Bond Yields Supports Continued Bullish Dollar Stance

  • Jan 27, 2017

Contrary opinion theory is a valuable tool to investors, but today there are so many self-described contrarians that we sometimes struggle to identify what’s “consensus” and what’s “contrary.”

Dec 07 2016

America’s Already First...

  • Dec 7, 2016

Thanks to the U.S. dollar’s recent spike, foreign equities in dollar terms declined during November while the U.S. markets were celebrating a Trump victory. Thirty-nine of the 49 MSCI country indexes are in bear market territory from the perspective of a dollar-based investor.

Apr 07 2016

The Fed’s Capitulation To The Dovish Side— A Win-Win For EM & U.S.

  • Apr 7, 2016

We have mentioned a number of times that China had experienced a very unpleasant “second-hand” tightening due to its peg to the dollar. Its trade competitiveness has suffered tremendously. With a weaker dollar the Chinese Yuan can re-gain some of its competitiveness while maintaining its peg to the dollar. A rare win-win in today’s convoluted world of finance.

Nov 06 2015

What’s Driving EM Currency Weakness?

  • Nov 6, 2015

A strong dollar and low commodity prices are major forces dragging down EM currencies across the board.

Jul 08 2015

What’s Next For The Dollar?

  • Jul 8, 2015

The U.S. Dollar Index has recovered about half the losses from a two-month, -7% setback from the 12-year peak it established in March.

Jul 08 2015

Navigating The First Rate Hike

  • Jul 8, 2015

Our current view is the lift-off will be December or later. Assuming inflation will pick up and the Fed hikes the rate by the end of 2015, stocks will perform relatively well, with international stocks a better bet than U.S. stocks.

Feb 06 2015

A Few Thoughts (And A Lot Of Charts) On The Oil Collapse

  • Feb 6, 2015

Has the recent collapse in crude oil prices presented us with a good opportunity for an outright commodity investment? No. Energy stocks aren’t on our radar screen either.

Feb 06 2015

Capex, Capacity And The Dollar

  • Feb 6, 2015

We’ve been highlighting the overinvestment (or malinvestment) risks in commodity-oriented equity sectors for the past three years, but we certainly did not foresee those risks exploding the way they have in the oil market over the last seven months.

Dec 05 2014

Can The Dollar Save Small Caps?

  • Dec 5, 2014

The dollar’s moonshot in recent months has resuscitated a stock market leadership argument we haven’t heard for a long time.

Dec 05 2014

The Dollar And Foreign Equities

  • Dec 5, 2014

Xenophobia continues to be a handsomely rewarded trait for U.S.-based equity investors, with the MSCI World Ex USA Index down 3.8% YTD through December 3rd—and now (incredibly) unchanged from its May 2011 high. Comparable period gains for the S&P 500 are +12.2% YTD and  +50% from spring 2011 highs.

Nov 07 2014

Inflation & The Dollar

  • Nov 7, 2014

Are U.S. markets for labor and capital actually getting tight?

Oct 08 2013

Debt Ceiling—Weakness Before But Strength After Resolution

  • Oct 8, 2013

A look at prior debt ceiling debates and patterns around resolution dates gives no surprises: markets are weaker in the two weeks before but stronger in the month after a resolution is reached.

Aug 07 2013

The Dollar: Upside Limited In The Near Term

  • Aug 7, 2013

A closer look at the dollar’s two main counterparts, the euro and the yen, reveals a regime shift in both cases, but for different reasons.

Mar 06 2013

Implications Of The End Of Negative Real Yield

  • Mar 6, 2013

The 10-year real yield turned positive at the end of 2012 and has stayed there. We expect higher interest rates, a stronger dollar, and lower gold prices in the next twelve months.

Oct 04 2012

Bulls, Bears & The Buck

  • Oct 4, 2012

Our latest testing indicates that relative dollar stability provides the best backdrop for stocks.

May 04 2011

The Bond Bubble Is Beginning To Deflate… Is This Cheap Money Era Ending?

  • May 4, 2011

An orderly decline of the dollar is not necessarily a big concern. On the other hand, a sudden collapse of the dollar, in conjunction with spiking U.S. interest rates, would be a terrible thing. So far this has not been the case.


Oct 05 2010

Mild Inflation, But No Deflation In 2010

  • Oct 5, 2010

We are maintaining our 2010 CPI estimate of +1.2%. (Core CPI +0.9%.)

Aug 03 2010

Year End Twelve Month CPI Deflation Reading Unlikely

  • Aug 3, 2010

Looking ahead to 2011, we are keeping a close eye on Housing, Food and Wages, which all could be bottoming out.

Oct 05 2008

Portraits Of Declining Inflation

  • Oct 5, 2008

Jim Floyd and Steve Leuthold believe that U.S. consumer price inflation has peaked and is headed for the +3% level by mid-2009. With current headline inflation running at +5.4%, that implies there is plenty of disinflation in the pipeline.


Apr 05 2008

What A Difference The Currency Makes

  • Apr 5, 2008

A look at gold priced in dollars versus euros.


Jan 05 2008

2008: Less Than Great

  • Jan 5, 2008

Yes, it is thermal pollution time again. It’s the new year when prognosticators and investment pundits produce large volumes of hot air, probably contributing to global warming.

Dec 05 2007

Long Term Bullish Case: Dollar Versus The Euro

  • Dec 5, 2007

Thanks to weak dollar, foreigners may be buying up Florida vacation homes. The U.S. is now on sale! Making the long term bullish case for a dollar rally against the euro.

Dec 05 2007

VLT Momentum On U.S. Currency...Applications (And Implications) For The Weak Dollar

  • Dec 5, 2007

Quite simply, VLT (which stands for Very Long Term) is a momentum oscillator which works best as a buy signal. Some market technicians have also suggested that VLT Momentum back-tests well as a currency indicator.

Jul 04 2007

View From The North Country

  • Jul 4, 2007

2007 half time report. Revisiting our original 2007 projections with some current modifications. Outlook for stock market, interest rates, inflation, profits, economy, the deficits, the U.S. dollar and gold.


Jan 03 2007

Inflation Is A Potential Threat

  • Jan 3, 2007

Inflation prospects are especially unclear. While many inflation gauges seem to be slowing, the threat of an inflation flare-up remains.