Will the US dollar depreciate further as the global economy recovers?

There was a time when shocks to the US economy would hit the dollar. But the opposite has been happening since the 2008 global financial crisis, when investors unexpectedly piled into the greenback as a safe haven – pushing its value higher than any other currency at the time.

As our chart shows, the correlation remains largely unchanged to this day – with the dollar appreciating whenever global manufacturing contracts or slows.

Now that the global economy is starting to recover, can we expect the dollar to further depreciate? Or will the government’s $1.9 trillion fiscal stimulus package finally reverse the trend?