June 18, 2021

Mind on Money: Add U.S. Dollar Index to numbers to watch | F. Marc Ruiz: Your Mind on Money

Currently, we find ourselves in a situation where the U.S. Dollar Index is now priced at the lowest level in seven years (source: MarketWatch), at the same time as consumer and producer prices as measured by the government’s CPI and PPI data are at the highest level since 2011 (source: NEBR). This correlation is to be expected, as both indicators are flip sides of the same coin, although the Dollar Index is a real time indicator and CPI is a lagging indicator showing price changes in the previous month or quarter.

Rather than get into the mechanics of this, to me the key is that this convergence of these multi-year highs and lows looks like a possible inflection point, and if these trends continue investors will need to be aware. Investors certainly have plenty to pay attention to as we crawl out of the COVID-19 crisis, and adding the U.S. Dollar Index to the list seems like a lot.

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