From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley
As 2022 approaches, the latest evidence from currency markets suggest the US Dollar Index $DXY could be stalling out.
Whether it resolves higher from the current continuation pattern is a key question with broad market implications. While dollar strength has been a headwind during the second half of 2021, we think it cools off coming into 2022.
In our view, there’s a good chance a weaker dollar will actually help put a bid in risk assets in the near future. This hasn’t been the case in a while, so let’s discuss what’s changed to make us feel this way.