The ARK Invest CEO says the US dollar is much stronger than investors think and could appreciate significantly over the next few years.
Why is it important for investors? A stronger dollar could pressure gold, reshape bond positioning, and test Bitcoin’s recent ability to rise rapidly.
Wood Says Investors Are Watching the Wrong Dollar Chart
Most traders follow the US Dollar Index (DXY), which tracks the dollar against six major currencies. ARK argues that measure is outdated.
The Federal Reserve’s broader index covers 26 countries and updates its weights annually. On that measure, Wood says the dollar has gained 36% since August 2008 and now trades 44% above its long-term average.
“Contrary to the current narrative, the dollar has not been weak relative to the currencies of our trade partners,” Wood wrote.
Her investment case is simple. Tax incentives are encouraging companies to reinvest in US factories and data centers, while she expects Fed Chair Kevin Warsh to maintain tight monetary discipline.
Wood compares the setup with the early 1980s, when stronger US returns helped send the dollar sharply higher.
In September, the DXY already posted its best month since June, gaining nearly 2% as the Fed raised rates and signaled more hikes.
The Trade Gets More Interesting With Gold and Bitcoin
Gold is the biggest challenge to Wood’s argument.
The dollar has lost 92% of its purchasing power against gold since 2002. Wood thinks tighter policy could reverse some of that move.
Gold has already fallen from its January record of $5,602 to around $4,140. Morgan Stanley’s Amy Gower still sees $4,000 as strong support, helped by central-bank buying.
That makes $4,000 a key level for investors watching Wood’s thesis.
Bitcoin offers another signal. BTC historically struggles when the dollar strengthens, yet it gained 6.14% in September while DXY also rose.
If that divergence continues, Bitcoin may be behaving differently from previous dollar cycles. If it breaks down, Wood’s stronger-dollar call could become a much bigger problem for crypto investors.
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