Why dollar bears aren’t shaken by currency’s 2021 bounce

MarketWatch/William Watts

“Much of the focus is on the euro, which accounts for around 58% of the weighting of the DXY. The euro had surged to a 2 1/2-year high above $1.23 versus the dollar last year — and its strength has rattled the European Central Bank. According to reports, the ECB is investigating whether differences in stimulus policies between it and the Federal Reserve account for some of the euro strength.”

USAGOLD note: Of course, Europe will do everything within its power to keep the euro from appreciating against the dollar. No one wants their currency to be a safe haven in times like these – for foreigners and domestic holders alike. That is why gold is appreciating against every major currency, and most of the minor scrip, as well. By the way, when you look at the longer-term chart on the dollar index, the move higher thus far is a small bump in the downslope.

line chart showing the US Dollar Index 1995 to present

Chart courtesy of TradingEconomics.com • • • Click to enlarge


Repost from 2-5-2021

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