gold, page-44736

My dollar trade went sour after Trump went on the attack with tariffs back in March.

Understand that at that time the "short dollar" trade was widely embraced so it was due for a correction.

No big deal.

Also need to remember that the fiscal expansion (record net US Fed'l gov't spending) and Fed rate hikes were working as expected.(rate hikes are price hikes and higher prices are inflationary)

Then came the tariff announcements.

Dollar started to correct higher and now with each successive threat it moves higher.

I understand how tariffs/protectionism can support a currency, but it takes time. It takes time to build trade surpluses. The U.S. is nowhere near having a trade surplus. It took Japan years to build trade surpluses high enough to cause the yen to rise. At the same time the country was running balanced budgets. Those are powerfully bullish conditions. The U.S. is nowhere near having either.

In the meantime, fiscal expansion and Fed rate hikes continue.

It would be easy to say the short dollar trade is wrong by looking at price action, but that would be foolish, I believe.

Looking at weekly charts and oscillators of various currency pairs or even the Dollar Index, it is rare to see such oversold (currency) and overbought (Dollar Index) levels like the ones showing right now.

Gotta stick with it.