The Dollar Wrecking Ball

The Breakdown

Blockworks

Investing, Business

4.8 • 786 Ratings

🗓️ 7 July 2022

⏱️ 15 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

This episode is sponsored by Nexo.io, Chainalysis and FTX US. On today’s episode, NLW digs into the idea of the U.S. dollar as a global wrecking ball, and explores why the dollar is the strongest it has been against other currencies in 20 years. As part of this, he also looks at structural weakness in Japanese and European currencies. - Nexo is a security-first platform where you can buy, exchange and borrow against your crypto. The company safeguards your crypto by relying on five key fundamentals including real-time auditing and insurance on custodial assets. Learn more at nexo.io. - Chainalysis is the blockchain data platform. We provide data, software, services and research to government agencies, exchanges, financial institutions and insurance and cybersecurity companies. Our data powers investigation, compliance and market intelligence software that has been used to solve some of the world’s most high-profile criminal cases. For more information, visit www.chainalysis.com. - FTX US is the safe, regulated way to buy Bitcoin, ETH, SOL and other digital assets. Trade crypto with up to 85% lower fees than top competitors and trade ETH and SOL NFTs with no gas fees and subsidized gas on withdrawals. Sign up at FTX.US today. - Enjoying this content? SUBSCRIBE to the Podcast Apple: https://podcasts.apple.com/podcast/id1438693620?at=1000lSDb Spotify: https://open.spotify.com/show/538vuul1PuorUDwgkC8JWF?si=ddSvD-HST2e_E7wgxcjtfQ Google: https://podcasts.google.com/feed/aHR0cHM6Ly9ubHdjcnlwdG8ubGlic3luLmNvbS9yc3M= Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW - “The Breakdown” is written, produced by and features Nathaniel Whittemore aka NLW, with editing by Rob Mitchell and research by Scott Hill. Jared Schwartz is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsors is “The Now” by Aaron Sprinkle. Image credit: MicroStockHub/Getty Images, modified by CoinDesk. Join the discussion at discord.gg/VrKRrfKCz8.

Transcript

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0:00.0	Welcome back to The Breakdown with me, NLW.
0:09.1	It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world.
0:14.8	The breakdown is sponsored by nexo.io, chain aliasis, and FtX, and produced and distributed by CoinDesk.
0:22.8	What's going on, guys? It is Wednesday, July 6th, and today we are talking about the dollar
0:28.5	wrecking ball. Now, before we get into that, a quick note. There are two ways to listen to the
0:34.2	Breakdown podcast. You can hear it on the Coin Desk Podcast Network, which
0:38.4	comes out in the afternoon and features both the breakdown as well as other great shows,
0:42.5	or you can listen to it on the Breakdown Only feed, which comes out every evening.
0:46.7	Wherever you listen, if you are enjoying the show, I would so appreciate if you took
0:50.6	the time to leave a rating or a review, it makes a huge difference, and I appreciate
0:55.0	each and every one. Lastly, a disclosure, as always. In addition to them being a sponsor of the show,
1:00.6	I also work with FTX. So, yesterday we caught up on all things crypto, and since then, the
1:07.8	craziness has just continued. It was announced this morning that Voyager is seeking bankruptcy protection, and I'm sure that
1:13.7	something will cover a little bit more as it gets sussed out.
1:16.7	But today, we are talking macro, and specifically we are talking about King Dala.
1:23.0	So an important term as we get into this, the DXY or Dixie is an index of dollar exchange rates
1:28.9	against a basket of international currencies. It's heavily skewed towards reflecting strength
1:34.2	or weakness against the euro and the Japanese yen, with the Chinese yuan making up the next
1:38.8	most significant weighting in the basket. So when we talk about the Dixie, it going up means
1:43.7	the dollar is getting stronger and the reverse means, well, the reverse. On talk about the Dixie, it going up means the dollar is getting stronger,
1:45.0	and the reverse means, well, the reverse. On Tuesday, the Dixie surged above 106, which is its highest
1:51.7	level since March 2002. The dollar moved around 1% against most major currency pairs on
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