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Bloomberg/Anchalee Worrachate, Susanne and Katherine Greifeld/8-20-2020
“The dollar has been overvalued for a long time, and this might finally be a catalyst for a multi-year downtrend. As we’ve seen before when valuations have been stretched, a policy or economic shock can quickly change the currency’s trajectory and that’s what seems to be happening thanks to the Fed’s swelling balance sheet, a surge in debt, and the way we handled the pandemic. – Jack McIntyre, Brandywine Global Investment Management
USAGOLD note: This article includes a dollar index chart similar to the one immediately below interestingly annotated, “Last bull cycle runs out of steam.” Lower highs and lower lows over time give the impression of a long term loss of momentum. Notably, the gold chart over the same period shows precisely the opposite, and that perhaps is one of the reasons why gold has done well since the dollar index topped out back in March.
Chart courtesy of TradingEconomics.com