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The NAVIGATOR - February 2019 - US$ Dollar Continues Higher into Mid-Year 2019 before 7.8-Year Cycle Reasserts Downtrend

US$ Dollar Continues Higher into Mid-Year 2019 before 7.8-Year Cycle Reasserts Downtrend – Long-Dated U.S./European Yields Heading Lower until June/July then Resuming Medium-Term Uptrend – Inflation Lower, then Surges Higher until 2021-24

INCLUDES ANALYSIS ON MAJOR US$ DOLLAR PAIRS/CROSSES – ASIAN/EM CURRENCIES - MEDIUM-TERM CYCLES – LONG-DATED YIELDS US/EUROPE/JAPAN + SPREADS

Highlights - Currencies

• The US$ dollar index is set to extend 2018’s counter-trend recovery through H1’19 – upside targets remain towards 102.79+/-, +6.0% per cent above current levels. The dollar’s push higher is part of the larger zig zag pattern underway from the Feb.’18 low of 88.26. Once completed, the dollar is expected to resume the next phase of its 7.8-year cycle downtrend, ultimately breaking far below the previous 88.26 level.
• The Euro/US$ began a counter-trend zig zag downswing from the Feb.’18 high of 1.2556 but this remains incomplete with downside targets towards 1.0589+/-. Once completed, sometime in mid-year 2019, the Euro/US$ is then expected to resume its 8.0-year cycle uptrend, extending far above the previous 1.2556 high.

Highlights – Interest Rates

• Long-dated interest rates, both in the U.S. and Europe are set to decline into the first-half of 2019 but then end 2018’s correction amidst a general downturn in global growth economies. Inflationary pressures are then expected to resurface, driving interest rates much higher into the end of the current decade and into the early part of the next. The ‘Inflation-Pop’ will send interest rates higher but trailing the uptrend in price-inflation, causing a repeat-scenario of the 1970’s.
• The 60-year cycle in Corporate Bond Yields forms its next peak in 2039-40.