Dollar In Freefall

Rumor has it U.S. Treasury Secretary Mnuchin wants a stable Dollar and that protecting its status as a reserve currency allegedly is the goal of the Trump administration. Unfortunately it appears that Mr. Mnuchin’s definition of ‘stable’ differs significantly from mine as the DXY has effectively entered a state of freefall over the past week.

And it may get a lot worse before it gets better. Recent CFTC reports show asset managers have added to their net long positions on the yen, the euro, the loonie, and the Swiss franc, which added fuel to a sell off that has sent the DXY tumbling by over 3% just this month.

Over the past three months the DXY has declined a whopping 5% which is heavily weighted against the EUR/USD. So while my ATM is mocking me over here in Spain all of you guys living and working stateside will most likely experience creeping price inflation all across the board, in particular when it comes to basic necessities like groceries, many of which are being imported from overseas.

The current Dollar short squeeze has sent gold into the stratosphere, which makes me very happy as I recommended long positions all the way back in early June at around GC 1740. It’s trading just below 1940 right now. You are welcome 😉

More market insights waiting below the fold for my intrepid subs:

Please log in to your RPQ membership in order to view the rest of this post. Not a member yet? Click here to learn more about how Red Pill Quants can help you advance your trading to the next level.

  • Mike
  • 3 years ago

About the Author

Hey there, I am one of the founding members of Red Pill Quants. I used to work as a systems engineer in Silicon Valley until I left the industry in 2008 to become a full time quant trader. It's been fun ever since.