As the dollar posted its best week in more than two years, we went ahead to look what has driven this move. We're skipping the regressions and simply taking a look at historical drivers of dollar moves
Spreads: Dollar index weighted rate spreads did not favor dollar strength. The contrary is seen by the BBDXY weighted spreads, these moved lower by 5 index points on the week
Volatility: Historically, the dollar has positive beta to volatility spikes. Looking at different measures of volatility, we did not spot a decent move higher. Actually, cross asset volatility has been trending lower over the last couple of months, the VIX is stuck at 20.0, however, JPM FX Vol index is now above 11%, reversing all the August declines
Recession fears: Every crisis has its own set of risks, comparing the dollar to 2008 might not be useful. Just in case
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