US Dollar Index Nears 52-Week High as M2 Grows 5.7%

The dollar index traded near 102.08 in early Tuesday trading, up 0.12% on the session so far and about 1% below its 52-week high of 102.95. In the same window, US money supply is doing the opposite of what the hawkish policy narrative would imply: M2 grew 5.7% year over year through August, to 23,342.8 billion from 22,092.6 billion a year earlier, according to the St. Louis Fed's M2SL series. Those two numbers describe the real liquidity story of the week, and it is a tension rather than a single signal.

Key Takeaways M2 grew 5.7% year over year through August, at 23,342.8 billion versus 22,092.6 billion a year earlier (FRED M2SL). The dollar index traded near 102.08 on October 27, roughly 1%…