Forex Investment and Currency Trading

2002-2004: Global money supply booms and the USD declines
Over the last decade there has been a clear connection between global money supply growth and the USD. Global M2 growth rallied from Q4-2000 to Q2-2003. The key driver was a massive rally in especially Eurozone M2 growth as US money supply contracted in this period after the burst of the dot-com bubble. The rally in global money supply eventually led to the massive weakness of the DXY from 2002-2004 – there is a lag time, but eventually the supply of USD told on the value of the currency.
2005: A temporary USD [...]

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