Jan 12, 2021 - Economy & Business

For all the fuss, the dollar rally has been underwhelming so far

Data: FactSet; Chart: Axios Visuals
Data: FactSet; Chart: Axios Visuals

The dollar index rose for the fourth straight session on Monday, worrying investors that the recent rally that has sent the dollar lower as stocks have risen higher could be coming undone.

What they're saying: "The appreciation of the dollar is coming at a time of not only rising yields but a risk-off period created by heightened uncertainty about political developments in the U.S.," Paresh Upadhyaya, director of currency strategy and portfolio manager for Amundi Pioneer Asset Management, told Reuters.

  • "I think that is exaggerating the strength in the dollar."

But, but, but: The dollar hasn't been that strong. The greenback is still about 7% lower than where it was at this time last year and has only risen by 0.7% year to date.

  • Further, Commodity Futures Trading Commission data released Friday showed speculators in the FX market remain extremely bearish on the dollar, taking net short positions to new highs.
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