As shown in the chart below, the Bloomberg USD Index (which includes a broader and more economically relevant range of currencies than the traditional DXY) has surged to the top of its recent range. After exploding higher in the second half of 2014 and first quarter of 2015, the dollar has since moderated as its rise has helped pressure US net exports down (wider trade deficit), suppress earnings (the S&P 500 has large international revenues) and drive down commodity prices. Over the last two quarters, the dollar has basically gone sideways. But the ECB’s extremely dovish press conference yesterday has kicked off a significant upside move for the greenback, which is now nearing the top of its recent range.
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