A ‘death cross’ is coming for the dollar. Why Trump will be happy.
Don’t look now, but there are some technical reasons to believe that U.S. Treasury Secretary Scott Bessent was right when he declared to the financial markets that “I am the house now.”
The dollar is on the cusp of forming a "death cross," a technical chart pattern that has historically been a bearish signal for the currency. This development has significant implications for the global economy, as a weaker dollar can boost exports and economic growth in the United States, while also increasing the value of foreign currencies.
A death cross occurs when the 50-day moving average of an asset's price falls below its 200-day moving average. For the dollar, this would be a notable shift, as it has been a strong currency in recent years. A weaker dollar could make American goods more competitive in global markets, which could be seen as a positive development for the Trump administration.
The potential for a death cross in the dollar is worth watching, as it could have far-reaching implications for financial markets and the global economy. If the dollar does weaken, it could lead to increased inflation in the US, as imports become more expensive. Additionally, a weaker dollar could also lead to a stronger euro and other currencies, which could have significant implications for international trade and economic relationships. To watch next: the actual formation of the death cross and the subsequent market reaction, as well as any potential policy responses from the Trump administration and the Federal Reserve.
Originally reported by marketwatch.com. ExpoNews adds analysis for finance & markets readers.