The dollar index hit 100.29 on Monday, its highest level in weeks, posting a 1.97% gain over the past month. Safe-haven flows into the dollar are accelerating as the Iran war, rising oil prices, and hawkish Fed expectations all funnel capital into the greenback. What our analysis flagged in the latest macro update is exactly this. The five-wave move off the January lows pointed to a multi-month dollar rally, and $100 was the next structural target.
DXY above 100 compresses everything denominated against it. Emerging market debt gets more expensive, commodity imports cost more, and crypto loses the tailwind it had when the dollar was weakening. For Bitcoin, a strengthening dollar is the opposite of the liquidity environment it needs to rally.