(Bloomberg) — The dollar’s ascent has become steep enough to create an obstacle for the bull market in stocks, according to Carmine Grigoli, chief investment strategist at Mizuho Financial Group Inc.’s U.S. securities unit.

The CHART OF THE DAY displays year-to-year percentage changes for the U.S. Dollar Index, an indicator that Grigoli cited yesterday in a report, on a monthly basis. The index, calculated by ICE Futures U.S., tracks the dollar’s value against the euro and five other major currencies.

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Daily figures showed the Dollar Index’s rate of change exceeded 25 percent this month for the first time since March 1985. The Standard & Poor’s 500 Index has a history of falling when the currency’s gains are that extreme, Grigoli wrote.

After dollar advances of 25 percent or more, the S&P 500 fell by an average of 3.2 percent in three months, 6.4 percent in six months and 5 percent in 12 months since 1972, according to data cited in the report.

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“The dollar’s blistering advance would prove problematic for stocks” if it persists, wrote Grigoli, based in New York. The Dollar Index’s year-to-year change peaked at 26 percent on March 13 and dropped in six of the last eight days, reflecting losses for the indicator. Yesterday’s reading was 21 percent.

To be sure, the currency’s rally may be largely over, he wrote. A gap between the economic performance of the U.S. and the euro region is narrowing “and interest-rate differentials seem to be peaking,” the report said.

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To contact the reporter on this story: David Wilson in New York at [email protected]

To contact the editors responsible for this story: Chris Nagi at [email protected] Jeremy Herron, Jeff Sutherland

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