The dollar is weak. We all know that but why? Now, one clear part of the answer is the oil price. If we take a look at the dollar index, compared against a range of other major currencies and how it's compared to the oil price over time, there's a plain inverse relationship.
A stronger oil price tends to mean a weaker dollar because oil transactions are denominated in dollars. When the price is higher, that means people have more dollars to sell. But it does look as though the dollar is rather weaker than you would expect from the oil price alone.
Another critical determinant of the exchange rate is yield differentials. And here it's very baffling. What we're looking at here is the spreads of US Treasury yields over equivalent German bund yields. That spread has been widening, meaning that there is that much more money to be made by moving money from Europe to the US.
You would therefore expect to see flows to the US and the dollar gaining. As you can see, the opposite is happening. That's a reversal of the usual pattern, and it's hard to explain. It does, however, have very significant influences on perceptions, particularly of stock markets.
If you take a look at the S&P 500 since Donald Trump was elected in November of 2016, you can see that it has been very impressive indeed in terms of weak currencies like the dollar or the yen but not anything like so strong if you look at it in terms of a strong currency since then like the euro or the pound.
If we strip out currencies from the equation and just look at everything in dollar terms, as you can see, the US stock market has done almost identically to the rest of the world since election day, with the occasional undulation along the way. The perception of a big America First agenda and a big move forward for the US, so far at any rate, rests largely on a weak dollar.