Is Trump Becoming a Part of the Furniture?

The Dow's volatility has not come down materially since Trump's tariff announcement, but as he begins to be seen as part of the background we could see further declines

- JAMAL MECKLAI

SINCE DONALD TRUMP'S inauguration on January 20, the DXY has fallen like a stone, mimicking in a sense America's credibility. It is today down over 10%, despite having given up some part (over 1%) of its gains in the past month. Perhaps more curiously, there is the volatility of the DXY, which had risen by 2.84% from 6.02% to 8.86% over that same period, and has fallen from its high of 9.33% a little over a month ago by 0.46%—a drop of about 16%.

Now, as readers of this column may have noticed, I spend a fair amount of time thinking about patterns, which I believe actually determine everything about markets and, in fact, life. The trick, of course, is to be able to decipher them and acknowledge that these are shifting sands—in other words, there is no certainty. In general, when volatility breaks out it tends to rise in nearly a straight line for four to six months, and after it tops out it falls quite rapidly. While I am loathe to assert a definitive turning point, might we have, indeed, passed that and will DXY volatility come down and, as a result, abort the recent dollar decline?