The "dollar smile" is this idea that the dollar strengthens when America does well and when everything is shit, including when that shit stems from the U.S. itself. We're currently in Schrödinger's dollar smile, where America is thriving and also sucking, and so various dollar-indices are hitting records.
Risks are high, particularly outside the US, and that prompts flows into the dollar; but those risks seem to be skewed to the upside, so good news for the US is also pushing up the currency. It’s never possible to prove causation, but the dollar’s rally overlaps almost perfectly with [Trump's] improving political fortunes.
Also, PREPARE FOR A WORLD DISCOUNT, Americans, and not just Europe on the cheap (bye-bye, euro!):
Not at all unrelated, we get this: "Traders working today, in bonds and forex, have no experience of a dollar this strong, or of rates that are steadily rising:"
Nobody knows what rising yields mean or how they work. Oops.
The world of money, as always, is in for a treat. Buckle up.
non-paywalled here
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