BUZZ-COMMENT-If you believe in stimulus, then bet USD will rise


Aug 24 (Reuters) - Stimulus is at the heart of financial-market moves, and it's likely to underpin the dollar's long-term appreciation.

The dollar's gains were born out of stimulus intended to support the economy after the global financial crisis. Since then, the dollar has risen over 35%.

The dollar's reverse since March is minor. It hasn't given up its 2020 gains and is a far from the minimum objective for a correction of its long-term appreciation from 2011's low.

In contrast, the dollar has almost reached the minimum objective for a correction of its most recent rally from 2018's low. The dollar is well-placed to resume its rise.

Amazing moves for stocks might hint at a more rapid appreciation. Stocks dived in March, then rebounded to record highs this month. That five-month about-turn compares with the nearly five years it took to achieve the same feat after 2008's crisis.

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Long-term dollar

Dollar since 2018

USD and S&P index

(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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