US Dollar Index Pulls Back from 18-Month High

The US Dollar Index has retreated from its 18-month peak, slipping below 102.00 after briefly topping 102.50 on Monday. The decline has brought the index near 101.85, marking a reversal from the September 9 low of 98.60. Momentum indicators have trended downward since late September, despite the index remaining above its 50-day Exponential Moving Average (EMA) around 100.35.

Meanwhile, investors are shifting toward riskier assets, pushing the S&P 500 to a record high. However, this gain is narrow, with Nvidia (NVDA), Apple (AAPL), and Microsoft (MSFT) collectively representing over 21% of the index. The Russell 2000, which tracks smaller companies, has seen minimal growth.

The drop in Brent Crude Oil prices is partially attributed to the Group of Seven (G7) releasing 100 million barrels of emergency stocks over four months. This release equates to roughly five days of oil that previously flowed through the Strait of Hormuz before the war.