A Bright Spot for the U.S. Economy? This Is It.
The dollar’s decline is actually good news.
Are market risks abating? Look to the dollar to find out.
Photographer: Bloomberg Creative Photos/BloombergThere’s been some chatter in markets that the rebound in equities this month and a re-steepening of the Treasury market’s yield curve are signs that investors believe the global economic outlook is looking up – or at least not getting any worse. As indicators go, those are fine, but perhaps the most telling may be the dollar.
The Bloomberg Dollar Spot Index — which measures the U.S. currency against a basket of major peers — is on track for its worst month since January 2018, falling 1.94% as of Thursday. That’s actually a positive: It suggests the risks that lured global investors into the safety of the dollar in September, pushing it to near-record highs by some measures, seem a little less threatening.