Has The Weak Dollar Sentiment Changed?
By Brian Kelly on June 22, 2009 | More Posts By Brian Kelly | Author's Website
The Euro is weaker vs. the dollar despite a positive German IFO number. For the third month in a row German IFO indicated that business was improving and the economy may have bottomed. Similar to sentiment in the US, the German business outlook indicated future strength. Since the ECB’s mandate is to keep prices stable ahead of economic growth, market participants expected the ECB to be the first to raise rates. However, ECB member Nowotny threw cold water on that perception.
Nowotny’s assertion that rates would remain unchanged until 2010 resulted in the Euro weakening vs. the dollar. The market is adjusting to the new reality that the dollar may be a better relative investment. This statement by Nowotny makes the FOMC statement even more important. Investors will obsess over the wording to determine if the Fed will be the first to tighten.
This is precisely the change in perception that we anticipated last week and was the catalyst for our purchase of US dollars via the PowerShares Dollar Bull ETF (UUP). The market appears to be catching up to our line of thinking and we anticipate adding to this position on strength.
Forex Wrap-up: A Massive Short-Covering Rally In The US Dollar May Just Be Starting
The Message Of The 2-Year US Treasury Note, Deflation And Japan
Video: The Week Ahead
3 Steps To Becoming A More Successful Trader
The Transportation Sector: Here Are Three Investments In A Sector That Are Ready To Soar
Bay Street Stocks Slip Slightly Again - Canadian Commentary - 14 hrs ago
Stocks Close Mostly Lower Amid Disappointing Quarterly Results - U.S. Commentary - 14 hrs ago
Bay Street Stocks Linger Slightly Below Unchanged Level - Canadian Commentary - 16 hrs ago
Stocks Remain Stuck In The Red In Mid-Afternoon Trading - U.S Commentary - 16 hrs ago
European Markets Fall, Led By Banks, Oils - European Commentary - 18 hrs ago


