I'm intrigued by how quickly the USD rally has been embraced, by writers, commentators, currency strategists all over the world, macro managers, trading floor guys, and people on TV.
This surprised me, and here's why. I thought sentiment on the USD was almost universally bearish. I would have expected a USD rally to have triggered laughter, and scorn. Instead, it has unlocked an enormous number of people who are practically tripping over themselves to plant their flag, in the rally. Marc Chandler of Brown Brothers Harriman has been trying to call a bottom in the USD for about 9-12 months now. He is unequivocal that the USD bear market is over. His thoughts are echoed widely.
I say: let the USD run a little. It can run up to 77.00 or 78.00 on the USDX, and still be quite weak in relation to the rest of the world. Longs will have to be quick on the draw however, because 2.00% FF and an even lower rate on cash deposits doesn't give much cushion on the trade, if it starts reversing on you.
G |
