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

To: Wyätt Gwyön who wrote (24177)	11/11/2009 1:41:04 PM
From: gregor_us	2 Recommendations Read Replies (2) \| Respond to of 71463

When will the USD rally, and why will it rally? FWIW I myself anticipate a USD rally once we get to .7000 on the USDX possibly by the end of this calendar year. However, I also sense that this rally may be in nominal terms only against other forex, and not real terms against things like Gold. But am interested in hearing your views. Oh, by the way, I regard the belief that the USD will rally as the new consensus. :-) G

To: Wyätt Gwyön who wrote (24177)	11/11/2009 2:17:03 PM
From: Real Man	1 Recommendation Read Replies (3) \| Respond to of 71463

The key reason for the USD bounce in 2008 was the spreading of US recession to the globe. Initially as the market dropped in 2007, so did the dollar, as the Fed lowered rates. Now that the globe is recovering, while US is lagging, the dollar is getting sold. This lagging is not bullish for US equities. I am personally of the opinion that now popular "the dropping dollar = risk trade " is simply wrong. It worked in 2008, but not in any other year. It is true that the carry trade is now borrowing in dollars. It only makes sense. The economic outlook is better elsewhere, so the US dollar will continue to drop, and if there is a second dip not followed by the globe, the dollar will indeed do quite poorly as the international capital exits USA and goes elsewhere, where there is real growth. As ZIRP is being kept forever, the dollar will continue to weaken, perhaps, substantially.