After some strength in December, and a blistering start to the year, the dollar is back to sliding, and now it’s back to levels last sen in November.
What’s going on? Just do a search of the word “tightening.” Here’s talk of India tightening. Chinese tightening goes without saying. Today Brazil is going to tighten. There’s even been, flabbergastingly, talk of European tightening. And UK tightening.
And lately, perhaps thanks to mediocre job creation, the talk of QE2 not going all the way has subsided.
So when central banks raising rates around the world, and the US keeping money cheap, that’s what you get.
(And for what it’s worth, it’s not an accident that all these emerging markets that are tightening now are seeing shaky stock markets, while US equities surge.)