The dollar is doing something it hasn't done in 6 years. Here's what it means

The dollar is doing something it hasn't done in 6 years. Here's what it means
PHOTO: Pixabay

The dollar index just closed its fifth straight month of losses, its longest monthly losing streak since 2011.

One portfolio manager said in an interview Monday that, despite this weakness, he wouldn't be surprised to see some relief for the greenback ahead.

"When I look to the next twelve months, I wouldn't be surprised to see the Federal Reserve raise interest rates two to three times, as well as start to slowly reduce their balance sheet. That should bring some more life, or breathe some more air, into the US dollar," Chad Morganlander of Washington Crossing Advisors, said Monday on CNBC's "Trading Nation."

For this reason, Morganlander said he wouldn't be "such a dollar bear at this point."

Higher interest rates, which are to be expected as the Federal Reserve is in the midst of a tightening cycle, typically boost the value of a country's currency relative to the value of foreign currencies.

The dollar index, which measures the value of the US dollar relative to a basket of foreign currencies (largely the euro), has dipped over 9 per cent year to date as the likelihood of President Donald Trump's pro-growth agenda getting underway has come into question.

The dollar index turned red midday Monday following news that the president's communications director, Anthony Scaramucci, would leave the administration.

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