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    Market Data

    May 24, 2018

    SMU Currency Analysis: U.S. Dollar Surged Last Month

    Written by Peter Wright

    Last month, Steel Market Update reported that the dollar had been trading in a narrow range for eight weeks and on April 13 had the same value as on Feb. 14. In the four weeks leading up to May 18, the situation completely changed as the dollar strengthened by 4.1 percent. (See the end of this report for an explanation of data sources.)

    The daily broad index reported by the Federal Reserve on May 18 was the highest since July 5, 2017, and was up by 3.0 percent year to date. The analysis of currency trends is a highly technical undertaking. Therefore, in this monthly SMU update, we frequently incorporate the opinions of other experts. On May 3, analyst Andrew McElroy wrote: “The U.S. dollar has surprised many by rallying to make new yearly highs. There are multiple reasons behind the rally, with central bank policy divergence and the Fed’s comments on the yield curve particularly influential. When one central bank (the ECB) is trying to find explanations for weakness and the other (the Fed) is highlighting strength, policy divergence and currency movement is understandable.”

    Peter Wright

    Read more from Peter Wright

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