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“The history of mankind is the history of money losing value.” – Milton Friedman
It’s been a quiet news morning, but that hasn’t kept futures from rallying. Treasuries are essentially flat, equities are modestly higher, and bitcoin is bouncing in a big way and back above the $40,000 level (for now).
Read today’s Morning Lineup for a recap of all the major market news and events including a recap of some notable earnings reports, major economic data out of Asia and Europe, and the latest US and international COVID trends including our vaccination trackers, and much more.
After an initial surge in the early days of COVID, the dollar has been on the defensive for the last year now. We saw a modest bounce earlier this year, but the rally in the Bloomberg Dollar Index stalled out in March just shy of its 200-DMA and is now back to testing 52-week lows from earlier this year.
Current levels for the Bloomberg Dollar Index represent an important line in the sand as it’s nearing the lowest levels in more than five years. Looking at the Bloomberg Dollar Index on a longer-term basis, we can see just how important the 1,100 level is. From 2005 through late 2014, there were only a handful of days where it ever traded above that level, but after breaking above 1,100 in 2015, it hasn’t looked back since. If that level does not hold going forward, it could mark an important turning point from a strong to weak dollar environment, and that would have implications on many asset classes and investment strategies.