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Trump and the dollar are doing something we saw just before the October 1987 stock market crash - MarketWatch

1. DXY is at its best since October 2022, reversing earlier losses. 2. Weak dollar historically correlates with strong U.S. stock performance. 3. Federal Reserve interest rate cuts could adversely affect stock markets. 4. The dollar's role as a stock market indicator shows unstable correlations. 5. Historical parallels with 1987 crash raise concerns for today's market.

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FAQ

Why Neutral?

While the dollar has strengthened, historical context suggests no stable correlation with stock performance. Past examples indicate both weakness and strength can coexist with positive stock returns.

How important is it?

The parallels drawn with the 1987 crash and the focus on interest rates make this highly relevant for DXY's future movements to investors.

Why Short Term?

Immediate impacts are likely due to Fed's interest rate decisions, influencing DXY quickly. Historical events provide signals for short-run volatility.

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