When the U.S. Dollar was king….

One year ago, I wrote a note when the U.S. Dollar Index (DXY) was at an overbought ‘extreme’.

The chart below reflects on that moment and those previous.

There have been 7 such times over the past 50 years.

Separately, this occurrence also has correlations to commodity prices and other assets.

The study below shows the percentages that the DXY Index was trading above its 50 month moving average whilst also registering a monthly overbought reading along and when the price was also 2.5 standard deviations above its rolling monthly mean.

And at various points in the past year or so, we still heard pundits calling for the demise of the U.S. Dollar.

September 4, 2023

by Rob Zdravevski

rob@karriasset.com.au