DXY | Major Cycle Peak – Is the Dollar Losing Its Grip?

4月3日

The U.S. Dollar Index (DXY) appears to be following a well-defined historical cycle, marking major peaks approximately every 15–20 years. If history repeats, the 2022 peak near 114 could signal the beginning of a multi-year dollar decline, impacting global markets, commodities, and currency pairs like EUR/USD.

Historical Peaks & Reversals
Examining past DXY cycles, we see:

• 969 Peak (~120): Followed by a prolonged decline into the 1970s.
  
• 1985 Peak (~165): Marked by the Plaza Accord, triggering a sharp dollar downtrend.
  
• 2001 Peak (~120): Led to a multi-year decline as the Fed shifted policies.
  
• 2022 Peak (~114): The most recent high—could it mark the next major reversal?
  

Each peak historically aligns with aggressive Fed tightening cycles, followed by a shift towards easing policies, leading to a weaker dollar. With U.S. interest rates expected to plateau or decline, this pattern suggests a potential long-term bearish trend for the dollar.

Implications of a Weaker Dollar

• Bullish for EUR/USD – A declining DXY typically strengthens the euro.
  
• Boost for Commodities – Gold, oil, and other dollar-denominated assets could rally.
  
• Stronger Emerging Markets – A softer dollar eases financial conditions globally.
  

With DXY showing signs of a historical cycle peak, investors and traders should watch for confirmation of a multi-year downtrend, potentially reshaping global markets.

7月9日

註釋

"969 Peak (~120): Followed by a prolonged decline into the 1970s."

* I mistyped the year, the correct one should be "1969 Peak (~120): Followed by a prolonged decline into the 1970s."