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Higher US interest rates, a relatively strong American economy and safe-haven demand have driven the dollar up about 22% against a basket of currencies over the past year. Analysts warn that this crowded long position raises the risk of a sharp reversal.
A crowded dollar position that unwinds could lift foreign-currency demand for US commodities and ease pressure on dollar-denominated feed prices. Until then, continued dollar strength keeps US export prices less competitive.
financialpost.comReutersSep 26, 2022
reuters.comSaqib Iqbal AhmedSep 26, 2022Not enough comparable past events yet for a historical read.
Not enough comparable past events yet for a historical read.
After 2,356 past bullish macro events, US Dollar (Broad) moved a median +0.2% over 5 sessions (60% higher; middle half -0.3% to +0.7%), and +0.4% over 20.
After 301 past bullish macro events, Brazilian Real (BRL per USD) moved a median +0.4% over 5 sessions (57% higher; middle half -1.2% to +1.7%), and +1.0% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Higher US rates, relative US economic strength and safe-haven demand drove dollar gains, though the crowded positioning is more a risk note than a direct driver.
