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Opinion: Why the U.S. dollar will continue to reign supreme

By October 11, 2019No Comments
Marketwatch | October 11, 2019

On Monday, my MarketWatch colleague Barbara Kollmeyer reported that noted investor Jim Rogers, chairman of Rogers Holdings, declared in an interview that despite “horrible” fundamentals, he’s buying the U.S. dollar anyway.

“Nobody in his right mind would buy the U.S. dollar BUXX, +0.03%, but I own a lot…because I’m not in my right mind,” said Rogers, who turns 77 this month and has been bearish on the dollar since at least 2004. “I’m assuming that the rest of the world is not in its [right] mind, either, and they’re all going to buy it.”

Translation: “I’ve been wrong on the dollar forever, but my ego won’t let me admit it, so I’m capitulating and calling it a trading strategy.”

This is the same Rogers who told an interviewer in 2008: “I’m trying to get all of my money out of U.S. dollars. I don’t know why anybody would put money into the U.S. dollar, and by extension into the U.S.”

Need I say it? Yes, I do. Since then, U.S. stocks DJIA, +3.44% have outperformed everything in sight, and the U.S. dollar index DXY, +0.06%, which bottomed at 80 in July 2011, now trades near 100.

In fact, the period since the financial crisis has seen the U.S. dollar become even more dominant, according to research by Brent Neiman of the University of Chicago Booth School of Business, Matteo Maggiori of Stanford University, and Jesse M. Schrager of Columbia Business School. That growing strength has shown up in global capital flows, ownership of dollar-denominated assets and as a barometer of investors’ appetite for risk.


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