The charts that matter: US dollar continues its bull run
The US dollar’s bull run continued this week. Here’s how it affected the charts that matter most to the global economy.
Welcome back.
In this week’s MoneyWeek magazine, we’re concentrating on inflation. Merryn talks to the Bank of England’s outgoing chief economist, Andy Haldane, who explains why price rises might prove rather more stubborn than many people think. We’ve also got a feature on how to buy into emerging markets – notoriously difficult – by using UK stocks as a proxy. If you’re not already a subscriber, sign up now.
This week’s “Too Embarrassed To Ask” looks at “zombie companies” - a term you may well have heard in this low-interest-rate environment. You can watch that here.
We’ve another big hitter on the MoneyWeek Podcast this week. Merryn talks to Jim Mellon, one of our favourite investment gurus. Jim explains what he’s buying – a lot of UK stocks – and why, with plenty of tips for you to investigate. They also talk about Big Tech (and why he’s not buying that), Big Oil (and why he is buying that), plus why Jim believes that the future of meat and dairy production lies not on the farm, but in the lab. Find out everything he has to say here.
Here are the links for this week’s editions of Money Morning and other web articles you may have missed:
- Monday Money Morning: The central bank race for digital currencies is hotting up
- Tuesday Money Morning: What will pop the UK's house price bubble?
- Merryn’s blog: Private equity isn’t evil, it’s just doing what traditional investors should be doing
Web article: What the FCA’s “ban” on Binance means for cryptocurrencies - Wednesday Money Morning: Inflation? A Covid relapse? Markets are trying to work out what’s coming next
Web article: Cathie Wood’s ARK Invest to launch bitcoin ETF - Thursday Money Morning: The US dollar is in a bull market. That’s bad news for most assets
- Friday Money Morning: Record M&A activity is usually a toppy sign – what does it mean today?
- Cryptocurrency roundup: Binance “ban” and a bitcoin ETF
Now for the charts of the week.
The charts that matter
Gold continued to trade in a range.
(Gold: three months)
The US dollar index (DXY – a measure of the strength of the dollar against a basket of the currencies of its major trading partners) perked back up in the latest leg of its bull run. That’s not good for any other assets, says Dominic.
(DXY: three months)
Dollar strength was reflected in the Chinese yuan (or renminbi) – when the red line is rising, the dollar is strengthening while the yuan is weakening.
(Chinese yuan to the US dollar: since 25 Jun 2019)
The yield on the ten-year US government bond continued to drift slowly down.
(Ten-year US Treasury yield: three months)
The yield on the Japanese ten-year bond turned sharply down.
(Ten-year Japanese government bond yield: three months)
And the yield on the ten-year German Bund slipped, too.
(Ten-year Bund yield: three months)
Copper continued to slip, reflecting broader commodity-price weakness (oil excepted).
(Copper: nine months)
The closely-related Aussie dollar followed copper down.
(Aussie dollar vs US dollar exchange rate: three months)
Bitcoin continued to slip lower. Regulators are cracking down, says Saloni, which could dent the price further.
(Bitcoin: three months)
US weekly initial jobless claims fell by 51,000 to 364,000, the lowest since 14 March 2020. The four-week moving average fell by 6,000 to 392,750.
(US initial jobless claims, four-week moving average: since Jan 2020)
The oil price wavered a little, but its bull run is intact.
(Brent crude oil: three months)
Amazon slipped further.
(Amazon: three months)
But Tesla held on to its previous week’s gains.
(Tesla: three months)
Have a great weekend.