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An FRBSF Economic Letter finds no convincing evidence that the dollar has become more sensitive to US interest rate changes since 2014. It notes that rate divergence between the US and other advanced economies has pushed the dollar up roughly 25% against a basket of currencies.
The analysis is research-based rather than a market-moving event.
The research clarifies how interest rate divergence drives currency moves that feed into commodity pricing. It offers no new shock to supply, demand or prices.
frbsf.orgJohn Fernald, Thomas Mertens, Patrick ShultzJul 1, 2017After 4,478 past macro events, US Dollar (Broad) moved a median +0.0% over 5 sessions (51% higher; middle half -0.4% to +0.5%), and +0.1% 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.
