US Markets

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

Credit: REUTERS/THOMAS WHITE

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

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 dollarhttps://tmsnrt.rs/3hs7LeO

Dollar since 2018https://tmsnrt.rs/2Ezj4TB

USD and S&P indexhttps://tmsnrt.rs/3leppoo

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

((jeremy.boulton@thomsonreuters.com))

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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