In Line with the improving US economy, the stock market along with the US dollar index has been heading towards the north lately. The main rationale behind the bullish stock market has been attributed towards the optimistic and sustainable looking US dollar. Amidst improving US economic indicator, more importantly relative to the other global economies, the US dollar is regaining its strength, eventually supporting the US equity market.

Scrutinizing the gain figuratively, just for a reference, the US dollar index has already gained more than 2.5 percent since the beginning of the current month, i.e., May. The prime reason behind this appreciation in the US dollar is the ongoing monetary stimulus regimes around the world, especially in major global economies. Beyond, as the Federal Reserve (Fed) has already given some signs on curbing the ongoing quantitative easing program taking into account the improving and optimistic looking US economy and observed recovery, the dollar has been slowly heading towards its heights. A more practical and effective example would be the doubling of bond buying, as a measure of monetary stimulus, by the Bank of Japan to realize the inflationary effect in the Japanese economy. This action has also appreciated the valuation of US dollar.

According to the market analysts, despite the dollar index may not sharply head towards the north following the extreme bullish pattern, it is undoubtedly sure that the index would be slowly gaining till the end of the second quarter of the year, at least. Despite the forecasts, it is purely up to the Fed’s monetary reforms and economic data coming from the US economy that would be affecting the strength of the US dollar index in the coming days. If the US dollar continues to strengthen, as predicted by the market analysts, it is for sure that the US equities, especially the domestically focused equities, shall be gaining their momentums in the days ahead, eventually contributing to lower the spiking commodities prices at the international market.