The US Dollar Index (DXY) has shattered resistance at 108, acting as a wrecking ball for global risk assets. The Japanese Yen has collapsed to 160 against the dollar, forcing the BOJ to intervene—unsuccessfully so far.
Emerging Market (EM) debt is under severe stress. Countries with high dollar-denominated debt burdens are seeing their credit default swap (CDS) spreads blow out. The 'Carry Trade'—borrowing in Yen to buy tech stocks—is unwinding rapidly, adding selling pressure to the Nasdaq.
Macro View: The Fed's 'Higher for Longer' stance is diverging from the ECB and BOJ, creating a rate differential vacuum that sucks capital into the USD.