The greenback has been on a tear as of late, rallying about 5.5% since the dollar index bottomed out just below 96 on election night.
In fact, the dollar index is up 10 days straight — the biggest surge since May 2015.
That puts the dollar at its best level in over 14 years.
Reasons: Simple …
FIRST, is all the flight capital leaving other countries and regions of the world that are in far worse shape than the U.S. Europe is going down the drain. So is Japan. So is the Middle East.
Plus, the more China opens up its currency market, the more yuan leave as wealthy Chinese get the opportunity to diversify and invest … and their main target is the U.S. of A.
SECOND, is that the dollar is now pricing in an inevitable rate hike from our Federal Reserve.
And THIRD, is general optimism over President-elect Trump’s policy of strongly desiring to repatriate the nearly $3 trillion of U.S. corporate money sitting overseas. A tax holiday of some sort is in the offing for that huge stash of cash and repatriating it would be hugely bullish for the dollar and for the U.S equity markets.
So it’s no surprise that my AI models have forecasted this rise in the dollar for some time now. And those same models are telling me that this trend should continue.
In fact, this chart clearly shows that the dollar index could easily continue moving higher heading into next year …
So, what does this all mean?