Home Economy UUP: Why The U.S Dollar Could Explode Higher (NYSEARCA:UUP)

UUP: Why The U.S Dollar Could Explode Higher (NYSEARCA:UUP)


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The Russian invasion of Ukraine has caused immense volatility across financial markets. While the situation is still changing by the day, there are two overarching market impacts. First is an increase in global inflation stemming from another commodity supply shock. Second is a race for safe-haven assets situated outside of Europe, namely, U.S dollars. Accordingly, we’ve seen a significant combined rally in virtually all essential commodities and U.S dollar exchange rates. Notably, by far, Russia is the world leader in total natural resource exports and deposits, so disruptions to their exports will substantially upset the global supply chain. While this may be necessary to stop conflict, I believe it may have a more significant inflationary impact than COVID-related production cuts.

Usually, higher commodity prices mean higher inflation and a worsening exchange rate. However, the unique situation of global markets…

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