The dollar index is about to record a new high for the year. With developments in Turkey, further supporting the greenback, the index is less than 0.1% off the peak.
This is the last movement of cash flows from emerging markets to the dollar, in a process that began in April. These flows help yield government securities to remain stable as investors pledge their dollars in the bond market. Part of this money may even fall into the U.S. stock market, helping to send the S&P 500 close to its highest point.
Much of these movements can be explained by the Fed's actions. High interest rates attract traders to dollar assets. And increases in the base interest rate strengthen the confidence that a country's central bank acts because of the strength of the economy.
Another side effect of the dollar's strength is the decline in gold. Observe and if it continues to fall, the dollar will almost certainly hit its highest value for the year.
As can be seen from the graphs of the key dollar crosses - it has a superiority over its peeers.
At this time on daily chart there are no good entry levels noticed, for the simple reason that the dollar is too strong. In order to be able to position ourselves with minimal risk on the market, we need to wait for a correction, otherwise the levels we would like to put our Stop Loss orders are just not good.
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