The Hated Dollar Resurges. But Why?

Betting against the dollar remains a favorite sport.
The dollar has done – as it so often does – the opposite of what was expected. Last December, the Fed raised its target for the federal funds rate and indicated that this time it was serious about tightening and that it wouldn’t flip-flop anymore. Two weeks later, the dollar, after surging much of 2016, turned around and headed south in defiance of the Fed.
On September 8 intraday, the dollar index (DXY), which tracks the dollar against a basket of currencies, hit the lowest point since December 2014. In a little over eight months, it had dropped 12% from its intraday peak on January 3. But that was it. Since September 8, it has bounced nearly 3%. The chart shows the weekly movements:

This post was published at Wolf Street on Oct 9, 2017.