Rich Dollar / Poor Dollar

Has the rally in the dollar run out of steam?

Source: Wikipedia

The US Dollar has been on a roll. Over the past year the trade weighted dollar has risen 25 percent. The strong dollar has depressed exports, retail sales, industrial production, corporate earnings, and a host of other factors. The combination of tighter money here and aggressive QE in Europe and Japan have raised the dollar’s value significantly, after three years of little change.

Source: Bloomberg

But lately a bit of the bloom has come off the rose. Interest rates have risen slightly in Europe and the growth of our economy stalled in the first quarter. Japan’s economy hasn’t taken off, but it isn’t falling into a recession, either. Many investors who expected a one-way trade of dollar-strength and euro-weakness have been caught leaning the wrong way. Over the last month the greenback has pulled back 10%.

Speculative markets work to make as many people look as foolish as possible as frequently as possible. If you think you’ve found their key, they’re about ready to change the locks.


Douglas R. Tengdin, CFA
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By | 2017-07-17T12:22:57+00:00 May 14th, 2015|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. –
Leave a comment if you have any questions—I read them all!
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