The Wednesday release of the minutes from the Federal Reserve's last policy meeting may reinforce the notion that chair Janet Yellen is putting the brakes on the central bank's 2016 rate hiking plans. This could spark a further decline in the U.S. dollar, to the benefit of a certain kind of equity, if history is any guide.
This end to the dollar bull is what Wall Street firm Stifel is predicting, especially given the 25 percent surge in the U.S. Dollar index, the greenback versus a basket of several currencies, since the lows of 2009.
"The Fed won't exit much, or at all, in 2016 if it means dollar strength and resulting price deflation risks including those that emanate from abroad," Stifel equity strategist Barry Bannister wrote in a note to clients Tuesday.
Yellen hinted at a pause in rate hikes last week at a speech before The Economic Club of New York. The Fed's next meeting is three weeks from now. The minutes Wednesday are from the dovish meeting March 16.
Using Kensho, a hedge fund analytics tool, we screened for the top performers in the when the U.S. dollar currency index declined by 5 percent or more in one month during the last decade.
