The US Dollar index made another leg higher today, eclipsing resistance at its highs from mid-summer in the process. Below is a one-year candle chart of the Dollar index. You can see that the move higher over the last few days has caused a break above the top of the currency’s downtrend channel as well. This couple with the series of “higher lows” puts the Dollar in a clear short-term uptrend.
A rising dollar can cause a big impact on the performance of stocks. Under this scenario, you typically see investors rotate out of companies that generate most or all of their revenues outside of the US and into companies that generate most or all of their revenues domestically. If you’re a Bespoke Premium or Bespoke Institutional subscriber, you can access our International Revenues Database to track geographic revenue exposure for every stock in the Russell 1,000. This is a very useful tool for asset allocation and positioning purposes.