Daily gold record
The best you can say about the euro is that it is so ugly that sentiment can hardly get worse.
Then again, you could have said that on New Year's Eve and it's down 100 pips to start the year. As they say, it's always darker…before it's completely black.
There is little support on this chart and right now the US dollar is so strong. The US capital markets are completely dominated and there is a network effect that snowballs, drawing more and more money into US dollars. The US stock market now makes up about 75% of the MSCI World Index and multiples on anything listed in the US are higher than almost anywhere else.
The world of free capital looks at the performance of things like the Mag7 compared to their home markets and feels envious. That money is flowing into the US today as we start a new year and new money goes to work.
At some point, there will be a bear market in the US or an underperformance of the US economy but right now the market just doesn't see it.
Like the euro, that indicates one-sided trade and the potential for a major reversal but until the music stops playing, you have to dance. Currently, the dollar continues to party like 2024.
