US Dollar: It’s Quiet…A Little Too Quiet
The Dollar’s steadfast climb in the nearly 20 months through December is extraordinary for a few reasons. For example, its persistence held despite ebb and flow in underlying fundamental themes such as risk trends, rate forecasts and wild swings in growth projections. But what is truly remarkable is the extremely restricted tempo the currency has maintained throughout.
Graph of Dollar Basket weekly with 20-week ATR (Chart 1)
The 60-day (equivalent to three-month) average true range for the DXY Dollar Index has scraped its lowest levels since the Summer of 2014 – considered the epitome of doldrums for the FX markets – while the historical range carved out over the past year is the lowest we have seen in the benchmark’s history.