Amid the stock market losses on Monday, one move could easily be overlooked by investors: The U.S. dollar is on fire. Against an index of currencies, the dollar rose to its highest level since April, 2006, according to Bespoke Investment Group.
"Trillion dollar bailouts, trillion dollar deficits, and the largest spending bill in U.S. history. These days, one would think that with all this spending, the U.S. dollar would be as popular as a Wall Street CEO," Bespoke said on its blog, Think B.I.G. "But when you're competing against the likes of Europe, the dollar suddenly doesn't look so bad."
You can add Canada to that statement, too. Against the loonie, the U.S. dollar was also moving higher on Monday, rising to $1.29 (Canadian), up almost a cent and closing in on its highest level since September, 2004.
Is the U.S. dollar near a peak? Bespoke noted that it is still well off its highs of the past decade. Indeed, as recently as 2003, the dollar was 12.5 per cent higher than its current level when measured against an index of currencies.