The 7 Year Dollar Cycle

A few years ago I came across an interesting article about a seven year dollar cycle. The point of the article is that on average every seven year a ‘top’ or a ‘bottom’ forms in the US dollar index.

US dollar seven 7 year cycle

You can easily see the cycle in this chart of the US dollar index (source):

Us dollar index long term

Since 2008 the US dollar index has been slowely drifting higher from 70.36 to 83.09 today.

us dollar index stockcharts 3 years

Last time everybody thought the dollar was going to collapse people considerd the euro to be of safe haven status. Oh how the tables have turned. Now a lot of people are very negative about the euro. I’m now waiting for books to come out that claim the ‘end of the euro’ or ‘the demise of the eurozone’ just like what happend when the dollar was falling.

Back when the dollar was about to ‘collapse’:
Super model Gisele Bundchen wanted to be paid in Euro’s instead of dollars. Article
Jay-Z flashed euro’s instead of the usual dollars in one of his video clips. Youtube
And a general in James Bond’s movie Quantum Of Solace (2008) proclaimed that: “Dollars are not worth that much anymore these days” while being handed a suitcase of euro’s.

Behavioral economics at it’s finest.

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