The last three days trading is all about the benjamins – the dollar, that is. The better than expected Friday November Jobs Report has triggered a powerful rally in the dollar. That’s because it has led investors to believe that the US economy is recovering giving the Fed cover to remove monetary stimulus and potentially raise rates. The rising dollar has hit stocks and other so called risk assets as these have benefitted greatly from all the liquidity flowing into financial markets via the Fed’s easy money policy.
For more on how the dollar is the linchpin of financial markets right now see:
“WSJ: The Dollar Is Driving Financial Markets”, Top Gun FP, November 2
“Dollar Weakness Driving Commodities, Stock Market Rally”, Top Gun FP, September 9