The dollar is doing something it hasn't done in 6 years. Here's what it means

The dollar index just closed its fifth straight month of losses, its longest monthly losing streak since 2011. One portfolio manager said in an interview Monday that, despite this weakness, he wouldn't be surprised to see some relief for the greenback ahead.

"When I look to the next twelve months, I wouldn't be surprised to see the Federal Reserve raise interest rates two to three times, as well as start to slowly reduce their balance sheet. That should bring some more life, or breathe some more air, into the U.S. dollar," Chad Morganlander of Washington Crossing Advisors, said Monday on CNBC's "Trading Nation."

For this reason, Morganlander said he wouldn't be "such a dollar bear at this point."

Higher interest rates, which are to be expected as the Federal Reserve is in the midst of a tightening cycle, typically boost the value of a country's currency relative to the value of foreign currencies.

The dollar index, which measures the value of the U.S. dollar relative to a basket of foreign currencies (largely the euro), has dipped over 9 percent year to date as the likelihood of President Donald Trump's pro-growth agenda getting underway has come into question.

The dollar index turned red midday Monday following news that the president's communications director, Anthony Scaramucci, would leave the administration.


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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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