From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley
The current market environment demands that we adhere to our risk management protocols as strictly as ever.
It’s a mess out there!
And with each passing day, more and more signs point to these challenging conditions persisting.
There is one data point in particular that we believe is likely to remain a serious headwind for risk assets: continued strength from the US Dollar.
We’ve covered this theme in detail the past couple of months as USD has rebounded against just about every major currency we track.
As always, we will continue to monitor the dollar as it is a vital piece to the intermarket puzzle.
Put simply, when investors are seeking safety in the dollar, it’s usually happening in an environment where stocks are under pressure.
Last week, we highlighted the violation of a key pivot low in our G-10 Ex-US Currency Index.
This week, we’ll revisit that chart, but with a slight twist, and then illustrate this broad USD strength using our updated trend summary table.