DXY Going Parabolic (Bad News)

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In this video, I discuss why the US Dollar Index (DXY) is strengthening so much. Most of its strength can be attributed to euro and yen weakness.

The yen continues to weaken against both the USD and the euro as the Bank of Japan prints more yen and buys JGBs in an effort to hold down yields.

The euro continues to weaken against the USD as Europe enters a deep recession with high energy prices (stagflation). As a result, the ECB will not be able to tighten as much as the Fed, which naturally leads to the USD strengthening against the euro.

A tightening Fed and strong USD is almost always bad for risk assets. Expect stocks and Bitcoin to continue to sell off until the Fed pivots and turns the money printers back on.

Not investment advice! Consult a financial advisor.

U.S. Dollar Index (DXY):
https://en.wikipedia.org/wiki/U.S._Dollar_Index

Euro/USD hits parity:
https://www.cnbc.com/2022/07/12/euro-teeters-on-the-brink-of-parity-with-the-us-dollar-on-recession-fears.html

Fed remains hawkish:
https://www.cnbc.com/2022/05/17/powell-says-the-fed-will-not-hesitate-to-keep-raising-rates-until-inflation-comes-down.html

Japan adult diapers vs baby diapers:
https://www.businessinsider.com/signs-japan-demographic-time-bomb-2017-3#adult-diapers-outsell-baby-diapers-2

Countries ranked by Debt/GDP:
https://www.worldeconomics.com/Debt/

Chart of US debt/GDP over time:
https://fred.stlouisfed.org/series/GFDEGDQ188S

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