The dollar could soon peak and that would translate to a positive for portfolios, CNBC’s Jim Cramer said Tuesday citing technician Carley Garner.
The “Mad Money” host took a look at Garner’s interpretation of the charts that suggests the DXY US Dollar Currency Index is nearing unsustainable levels. Garner, who is the co-founder of DeCarley Trading, thinks it could soon drop because it has had a hard time breaking out over 98 since 2013, Cramer said.
The index currently stands at about 97 as of late Tuesday.
Cramer said the U.S. dollar has been climbing since hitting a bottom in January 2018 and has hurt the market. It makes exports more expensive than foreign competitors, while companies that have foreign earnings can’t get the full value of their profit because the exchange rate is not in their favor, he added.
Analysts who cover U.S.-based multinational stocks would be triggered to raise numbers on various names like Procter & Gamble, Pepsico, Apple, and Google-parent Alphabet, Cramer said.
A strong currency brings many benefits, but there is a lot of harm that comes with it, the host said.
Listen to Cramer explain how a U.S. dollar peak could impact the economy here