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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: gregor_us who wrote (6686)	4/30/2008 4:05:00 AM
From: Real Man	Read Replies (2) \| Respond to of 71456

The USD started tanking as the housing bubble went into full bloom. It's more of a function of rates set too low in 2002, then baby step raises. The baby step raises did contribute to the dollar rally. Now shrinking USD/Euro interest rates differential will likely contribute to USD rally as well, and many are counting on that. In some sense, most of the currency drop already happened after Mr. Ben cut in August, as the interest rates started pricing a lot more reductions to come. Depends on Trichet. If he cuts once, the buck will gain, possibly a lot. If he does not or raises, then no. Weakening economy in Euro area increases speculation that he will cut, and then the dollar will have an intermediate term rally. Otherwise it won't.