Kelly Evans: The imbalances are getting extreme.

The U.S. dollar is surging to historic highs, right as President-elect Trump is about to take office.

We hit 110 on the Dollar Index this morning (which measures it against a basket of other major currencies). To put that into perspective, since the early 1980s, there have only been two other times the dollar has been this strong. Very briefly in late 2022, and before that, for a two-year stretch from late 2000 to 2002. So this is very lofty territory.

Stocks are doing their best to take this in stride, but the Nasdaq is down another 1.5% today, and the S&P and Russell are down about 0.8%. And with the volatility gauge resting above 20, from a low in the 13s last month, you get the feeling there could be yet more near-term downside. It’s impressive, and not in a good way, that oil and other commodities are rising even with this strong-dollar headwind in place.

Source: CNBC