Dollar strength continues

The dollar is nearing the highs for the year once again. Rising interest rates in the US have bolstered the dollar this year as other major central banks are not near the same part of the cycle as the US. The BOJ came out last night lowering inflation forecasts in a sign that rates and asset purchases will still be a part of the picture in Japan. The Euro and Pound outlooks for rate increases look murky from the threat of a hard Brexit and political and fiscal divisions across Euro member countries.

The only shorter term catalysts that could substantially move the Dollar lower would be heightened trade war rhetoric or signs that the language is starting to affect the overall economy (through corporate earnings or otherwise). These factors seem to be longer term trends that will take time to develop which means in the mean time, expect the dollar to remain strong going into the 4th quarter.