Dollar Index DXY and South Sea Bubble

South Sea Bubble: Strategists led by David Bloom argued in March that the rally was nearing the end of its run, making HSBC the first bank to raise its euro EURUSD, -0.58% forecast for 2016 and 2017, according to Market Watch. In a Friday note, they elaborated on their call, drawing a parallel between the ICE dollar index DXY, +0.45% gain of more than 25% since May 2014 and classic bubbles, such as the tulip mania that gripped the Holland in the 17th century or the South Sea Bubble of 1720. This time drawing a comparison between the currency sharp rise since last May to the pattern presented by classic asset-price bubbles. This constitutes a significant move and major rallies tend to have similar life cycles, HSBC wrote. In the chart included in this report, they lay out the anatomy of typical asset-price bubbles, which HSBC researchers divide into four phases. In fact, such life cycles tend to follow the typical phases of classic asset-price bubbles, just on a smaller scale. (news.financializer.com). As reported in the news.