DislikedI think if yields rise should be dollar bearish.Ignored
However, the current FOMC monetary policy in combination with a promising outlook for the US economy is pushing investors to re-balance the ratio between bonds and US equities. As such capital is moving out of US (and other Western) bonds and into US equities. The effect from that is both USD bullish and US bond bearish (Higher US bond yields) as well as Canadian, German, Dutch and British bond bearish (again translating into higher bond yields). This is the new paradigm in a market with a fairly consistent appetite for risk. If investors can get better yield from dividend paying equities than from the bond markets, it makes sense that the chicken is going to cross that road fairly quickly, especially if market fears are tempered, or in some cases eliminated.
The true test will now be twofold:
1. The US debt ceiling and budget negotiations.
2. Q4 corporate earnings season.
Those who say it cannot be done should not interrupt those who are doing it