The Seven Stages of the Dollar

Posted by Jack Crooks - Black Swan Capital

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“How poor are they that have not patience! What wound did ever heal but by degrees?”  – William Shakespeare

FX Trading – Seven Stages of the Dollar

Note: This is a reprint of a piece we did back in 2008.  If you have read Currency Currents for any length of time, you likely know we believe the US dollar bottomed in March 2008 (the credit crunch low) and has entered a multi-year bull market.  We think we are now about to enter Stage 2 in the dollar cycle: The beginning of a self-reinforcing process. Relatively better US economic growth and rising interest rates will be the drive.

It’s always difficult to pinpoint where we are in terms of a trend.  Long-term trends in the currency markets have ranged from six to ten years, measured by the various bull and bear markets in the dollar since the inception of the free-floatingcurrency market back in 1971.  Here’s the pattern of long-term bear and bull markets in the dollar as measured by the US $ Index:

… more HERE