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Strategies & Market Trends : Zeev's Turnips - No Politics
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To: ahhaha who wrote (80597)6/18/2002 3:38:29 PM
From: velociraptor_  Read Replies (2) of 99280
 
The falling dollar is not bullish for stocks. The last 10 years in the markets have invited billions and billions in foreign investments, not only in stocks but in bonds and treasuries as well. A falling dollar makes all of that unattractive to foregin investors because it has an opposing effect on those gains as it lowers value. In a market that is already weak, the falling dollar further compounds the problem and encourages liquidation by foreign investors which adds selling pressure all around. Interestingly, a rising dollar is also not good because the DOW consists of many multinational companies and it is the DOW which has held the fort for the last 2 years. A rising dollar in this case lowers the value of foreign dollars and thus lowers the revenue of those companies.

It's a catch 22 with a cliff on either side. The only resolution is a stable dollar.
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