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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: BOC who wrote (660)11/14/2000 11:42:52 AM
From: Street Hawk  Read Replies (2) of 74559
 
I actually think a weak dollar will lead to a weak market.

One of the main drivers for the strong dollar has been the strong stock market, which has attracted capital inflows from abroad. Once the dollar starts weakening and facing up to the humongous current account deficit, then we will see more panic selling in the stock market. No one wants to lose both ways, in terms of currency weakness and stock market weakness. There is no incentive for foreign investors to invest in the US stock market when the dollar is going down. You have to also realize that domestic sales is more important than international sales for most US companies. The US is not an export led country like Japan. A weak yen for Japan is a much bigger boost for their companies than a weak dollar is for the US and its companies.
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