US-German yield spreads suggest higher Dollar Index

2024年3月12日

It's reasonably well appreciated that the biggest component of the dollar index DXY is the euro. Therefore when trying toanalyse the future direction of the Dollar one needs to consider what is happening to the spread between yields in the two main economic areas (US and Germany as a proxy). If we look at US10Y-DE10Y historically we can see, as might be expected, when the spread rises/widens the Dollar strengthens. So to me, it loks like wwe are currently forming a bullish flag consolidation pattern in the yield spread, suggesting that at some point soon we will get a move higher in the spread, and with it a higher DXY.

NOT INVESTMENT ADVICE.

2024年4月16日

註釋

Over the last month since I posted this chart the US-GErman 10yr spread has widened more than 35bps and the DXY Dollar Index has strengthened by 3.5%. Still looks like they have some more upside.

2024年4月19日

註釋

US10yr yld -DE10yr yld UPDATE
Still headed higher (yield spread and USD).
ECB'S WUNSCH: U.S. AND EURO ZONE ECONOMIES HAVE DECOUPLED || GAP BETWEEN ECB, FED RATES MAY WIDEN