I was on Bloomberg TV this morning to weigh in on the dollar's rally. The US Dollar Index is flirting with the 100 area that has blocked side since last year.
In my work, after a big run-up form around 80 in mid-2014, the Dollar Index has been consolidating. I have long anticipated a springboard for another leg up. The fundamental logic was the divergence in monetary policy and the relative health of the financial system.In addition, regardless of who won the election, US fiscal policy was set to turn more accommodative.
A new factor has also emerged that pushes in the same direction. Europe is particularly vulnerable to a reemergence of nationalism/anti-globalism.Many see Brexit, Trump's electoral success as the first two points, with the Italian referendum in early December to be the next obvious flashpoint, followed by the French presidential election next spring.
If I am right, the Dollar Index is headed back toward 120.
Video Length: 00:04:37
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