How far could the USD fall before it became disruptive? HSBC Has A Number

At what point is too much for the US dollar? With talk of a trade war and tariffs seemingly at every turn – President Trump signed orders Thursday placing a 25% tariff on imported steel and 10% on aluminum – how low can the US dollar go before investors would “start to have serious economic and financial market consequences?”

Mark McDonald, HSBC’s head of FX quantitative strategy, looks at the US dollar market and sees both odd fundamentals, but more to the point odd technical divergences.

The significant downtrend in the US dollar, which...