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US Dollar Index Looking Up?

by: Bespoke Investment Group August 07, 2008 | about stocks: UDN / UUP    

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The US Dollar index closed just above its 200-day moving average Wednesday for the first time since October 2006, and also just above its high from mid-June.  The breakout of its trading range that had been in place since March is a win for Dollar bulls. 

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This article has 3 comments:

  •  
    Aug 07 08:24 AM
    hallelujah
    Reply
  •  
    Aug 07 09:33 AM
    Amazing, but true. The Dollar has bounced. However, it's not so much a phenomenon of Dollar strength, as it is a phenomenon that the rest of the world, including the Eurozone, is collapsing. The perception is that the U.S. is close to a possible bottom, while the rest of the world is just starting downhill.
    However, the U.S. government has so much debt, and it is increasing exponentially every day, that it seems unsustainable. When does the house of cards collapse?
    CNBC tabulated the entire amount for the bail-outs and rescues so far. The total was $1.43 trillion so far since Aug 07. And that doesn't even include the U.S. budget deficit for this fiscal year, which is nearly 1/2 trillion Dollars. And THAT still doesn't even include the supplemental spending for the Iraq War. If all of these are tabulated together, we're talking well over $2 trillion for just ONE year!
    Reply
  •  
    Aug 07 11:48 PM
    The probability now is that the dollar rushes upward to the 76-77 area. This will prove to be the undoing of the US stockmarkets.

    A mainstay of S&P earnings had been the Oil and mining sector and Exports. The weakened Eurozone and stronger dollar will ensure that the earnings from the above will weaken considerably.

    AIG is a case to be studied since it can be applied onto both the Mortgage and Insurance sides equally.
    The Auction Rate Securities settlement with Citigroup will create a spillover effect onto the rest of the issuers in this sector.

    All of this is deflationary while the FED is stupidly addressing an inflation it has no control over other than if it is its unvoiced intent to drive the US into a Depression.
    Reply
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