Have a look at what the stock market has been doing compared to the US dollar below. Normally they oppose each other, but recently they have been rallying up together.
|stock market comparison|
But why has this been happening? Well...... that is an interesting question.
Since the beginning of May, the dollar index has gained more than 2.5 percent. The dollar has been rising as a number of central banks around the world increased their easing, there has also been talks that the fed is going to scale back their normal bond buying programs, and investors are currently looking for safety.
Even though the US dollar is overbought, we could see higher prices come our way. The U.S. greenback broke above the key 100 yen mark for the first time in over four years. If global growth picks up then there could be more up for the US dollar. Most investor do not have too much confidence in the US right now, but they are seeing the US dollar as a safer haven for now, or the better place to invest.
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