[Toddsterpatriot]

A flat yield curve leads to a stronger dollar but so does a strong economy and a restrained government, which would be the preferable mechanisms.

I understand that a strong economy would lead to a stronger dollar but have never heard that a flat yield curve leads to a stronger dollar. Do you have any links that deal more with that assertion?

[Moonman62]

A higher interest rate paid on dollars (and the anticipation of further rate hikes) attracts more currencies to be converted into dollars and dollar denominated assets, thus strengthening the dollar. The yield curve gets flattened by the Fed raising short term interest rates. If you want some links do a Google on the relevant terms. It makes sense to me and I've seen several articles on it over the years.