The US Dollar has surged higher overnight, and significantly so. Note that on this daily chart (left), the greenback has broken out higher from its recent downward trend. Even on the hourly chart, shown here on the right side, the value of the Dollar has moved dramatically higher in the past 24 hours. Still, it remains barely within its recent range, as shown by the Bollinger Bands. The value of the Dollar would need to break out above those Bollinger Bands before I would consider this anything but a sucker's rally. There is a growing sentiment that the Fed may be close to completion of its interest rate easing cycle, and that they may soon stop, providing a fundamentals-based reason for the rally. This rally may very likely be caused by traders shedding their Dollar short positions ahead of the FOMC meeting next week. This should help to shore up the value of the Dollar somewhat short-term, and may put a top on commodity prices.As a consequence, many commodity prices are moving lower, including gold, corn, and soybeans. Still, expectations for inflation are surging, with more and more companies announcing price increases due to the cost of commodities. Whirlpool made such an announcement this morning.
