Strong Dollar Has Global Effects

The equities markets were mostly neutral today, but turned more bearish towards the end of the session as traders failed to find bullish news, and traders continued to focus on the strengthening US dollar. Recent strength in the dollar is primarily due to expectations that rate hikes will proceed at a moderate pace in the US, but will not be likely in Europe or in Japan. Meanwhile, it would be expected that China will seek to weaken the yuan currency in response to US pressure on trade. US treasuries also continued to weaken, pressing yields higher. With all of these things in mind, we might reasonably expect more downward pressure on the equities markets for now, as a stronger dollar will hurt our exports. Here’s what to expect.