• GB Davis

Market Insight: Dollar Strength

We called the first interest rate hike by the Federal Reserve to the month, one year prior. We called December 2018 as the last rate hike by the Fed, before the Street. We have called EVERY Federal Reserve interest rate decision (FOMC) correct this cycle. What is one impact of the Fed's policy currently vis-a-vis other global CBs? Europe, in aggregate, and the UK have slower growth rates than the U.S. Australia has caught the Chinese Flu, coupled with a difficult housing sector coming off. Noted below is $UUP, Invesco DB US Dollar Index Bullish Fund. Do you need to buy this? (we never give investment advice, see FAQ), probably not you are most likely incredibly long USD and benefiting directly and indirectly. However, what are a couple of key takeaways from this? As a proxy for U.S. Dollar strength (as we use it, without getting into FX pair movements, just yet) - the Relative Strength Indicator (RSI) - bullish, without breaking 70 technical level. 50-day moving average, leading the 200-day moving average. MACD showing a bullish confirmation in the recent cross-over. We expect Dollar strength for sometime, with the RBA being amongst the first CBs to cut late this summer. #NotInvesmentAdvice #FederalReserve #InterestRates #USD #UUP

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