Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 
 
Blog Home
Bob Carey
Chief Market Strategist
Click for Bio

Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 

  A Snapshot Of The U.S. Dollar
Posted Under: Conceptual Investing
Supporting Image for Blog Post

 
View from the Observation Deck  
  1. We get asked from time to time what our take is on the U.S. dollar and where we think it may be headed next. 
  2. The dollar is still regarded as the world's primary reserve currency. Its relative strength over time can be influenced by such things as central bank monetary policy, geopolitics and trade. 
  3. U.S. investors with exposure to foreign securities, commodities and the stocks of U.S. multinational companies are particularly vulnerable to fluctuations in the U.S. dollar. 
  4. Predicting the direction of the dollar, or any currency, can be a daunting task, even for professionals who specialize in it. One thing we can provide is some context. 
  5. As indicated in the chart above, as of 11/3/21, the 10-, 20- and 30-year averages for the U.S. Dollar Index registered readings from 89.44 to 91.24, which is a relatively tight range over a span of 30 years. The average of the three averages is 90.46, a bit below where it stood at the close on 11/3/21 (93.88). 
  6. To add some additional context, over the past 30 years, the index peaked at a reading of 120.90 on 7/5/01, while hitting a period-low of 71.33 on 4/22/08, according to Bloomberg.
  7. The Federal Reserve announced yesterday that it will begin to taper its monthly purchases of Treasuries and mortgage-backed securities later this month. It plans to trim it from $120 billion ($80 billion in Treasuries and $40 billion in mortgage-backed securities) by $15 billion per month until it finishes the process around mid-2022, just in time for the market implied initial federal funds rate hike in July 2022, according to Brian Wesbury, Chief Economist at First Trust Advisors L.P. 
  8. A recent Reuters survey of nearly 70 foreign exchange analysts found that the U.S. dollar's relative strength against major currencies in both the short and medium-term will likely be influenced most by investors favoring currencies associated with higher interest rates.  
This chart is for illustrative purposes only and not indicative of any actual investment. Investors cannot invest directly in an index. The U.S. Dollar Index (DXY) indicates the general international value of the dollar relative to a basket of major world currencies.

Download a PDF of this post, please click here.
Posted on Thursday, November 4, 2021 @ 2:16 PM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
MARKET ANALYSIS
Market Commentary and Analysis
Market Commentary Video
Weekly Market Commentary
Weekly Market Watch
Monthly Talking Points
Quarterly Newsletter
Market Observations
Subscribe To Receive Email
 


 PREVIOUS POSTS
Sector Performance Via Market Cap. (2020 Bear Market & New Bull Market)
US Stock Markets Ended Oct. 29, 2021
US Economy and Credit Markets Ended Oct. 29, 2021
A Snapshot Of Materials Stocks
The Price Of Crude Oil Has Surged During The COVID-19 Pandemic
US Stock Markets Ended Oct. 22, 2021
US Economy and Credit Markets Ended Oct. 22, 2021
Passive vs. Active Fund Flows
A Global Snapshot Of Government Bond Yields
US Stock Markets Ended Oct. 15, 2021
Archive
Skip Navigation Links.
Search by Topic
Skip Navigation Links.

 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2022 All rights reserved.