USD falls when there is an abundance of dollars, and rises when there is a shortage. It is an empirical fact that the world has been structurally short dollars since 2011 (really, since the GFC).
And the conditions for this trend haven't changed yet. Debt-to-GDP ratios keep increasing, credit impulses are waning, and the rate of productivity growth is stagnating. The upward pressures on dollar funding continues on.
The question is whether or not the dollar's fall since September 2022 is over. And there are early signs it has. We're ostensibly at the bottom of the new USD range.
Generally, it appears to take about 90 days for
DXY
to get back to the top of the range. Which would put us at a +12% gain by summer 2024. Riding a dollar bullrun for the next year can be lucrative. Not to mention all the other correlation trades that come into play.
And the conditions for this trend haven't changed yet. Debt-to-GDP ratios keep increasing, credit impulses are waning, and the rate of productivity growth is stagnating. The upward pressures on dollar funding continues on.
The question is whether or not the dollar's fall since September 2022 is over. And there are early signs it has. We're ostensibly at the bottom of the new USD range.
Generally, it appears to take about 90 days for
DXY
to get back to the top of the range. Which would put us at a +12% gain by summer 2024. Riding a dollar bullrun for the next year can be lucrative. Not to mention all the other correlation trades that come into play.
"Even the wise cannot see all ends." - Gandalf
Connect with me on Twitter. I'm always open to discuss.
Connect with me on Twitter. I'm always open to discuss.
