It took about a year of consolidation but it looks like the dollar could be on the verge of another breakout higher. After trading in a fairly tight range since the beginning of this year, the nominal trade-weighted dollar (major currencies) has poked out to its highest level since 9/4/2003. The dollar is now over 35% higher than the trough level that it hit is the summer of 2011 and only about 20% from the most recent high hit in February 2002. The dollar is breaking out just as the spread between the 2-year US government bond and the 2-year German government bond has widened to the widest level since 2006. As we have mentioned previously, if the dollar is embarking to a new high level this should continue to add pressure to commodities, emerging market equities and US profit margins.