Posted 3/27/2024, 4:23:30 PM
Dollar Poised to Strengthen Further, Tightening Financial Conditions and Weighing on Stocks
- The dollar will likely strengthen as central banks shift policy and widen interest rate differentials compared to the Fed
- A stronger dollar tightens financial conditions and is a headwind for the stock market
- Interest rate spreads between US and German, Japanese, and Swiss debt suggest further dollar strengthening
- The dollar index is returning to resistance levels and threatening a breakout
- Interconnectivity between the dollar, financial conditions, and stocks means a stronger dollar suggests lower equity prices