Currency Report: The Line in the Sand Just Got a Whole Lot Closer
The dollar has been wreaking havoc, bringing a critical level back into play.
After last weekend's events, we got the classic kneejerk: oil and the dollar spiked, while risk assets sold off. A flight to safety. Sell everything, bid dollars.
Energy is the obvious trade and needs no explanation. Supply disruptions both real and perceived, fear, and mispositioning.
The bigger question is the dollar. A stronger greenback is the quickest way to put pressure on what has been one of the strongest themes of this cycle: international equities.
Our warnings last week were timely. And what we've seen since isn't an orderly pullback. The speed and the volatility scream panic.
But we have to stay objective. Price, not headlines, is our style.
We're now approaching the line in the sand. The most important level in the market.