After months and months of steady declines... and after the whole world hates the thing... it's time for a dollar rally.Remember, you can view currencies like the "stock" of a country. When times are good and its finances are in order, a country's currency tends to rise. When times are bad and its finances are a mess, a country's currency tends to fall.
Today's chart displays a "mess." It's the 13% decline in the dollar from its March peak – a giant fall for a major currency. The market doesn't think much of Washington D.C.'s new "tax and spend our way to prosperity" idea.
But as our colleague Jeff Clark has covered in Growth Stock Wire, the negative sentiment toward the dollar is at extraordinary levels... so a solid rally lies ahead. And last week, we saw a bit of price confirmation for this trade...
The dollar index struck a low at 76.25 early this month... then started moving higher. It looked like the bottom was in until sellers pushed the dollar down even farther. This last selling surge had no power, however, and the dollar climbed back to its highest point in three weeks. Everyone hates the dollar, but it's rising... which is a great bullish sign.
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