Home » Trading

Dollar Higher

17 December 2009 No Comment

Take a look at the PowerShares DB US Dollar Index Bullish (UUP) ETF. The US dollar has broken higher of the 50 day moving average, potentially signaling a change in direction and maybe a short term bottom.
U.S. Dollar Index (UUP) Chart
In the bizarre world that we live in, a strong dollar is a bad thing, hence the sell off in equities today. I believe the long term negative trend in the dollar is in tact but we’re going to see reversals like this along the way.  If we lived in a world of common sense, we would cheer a strong dollar, but we don’t.  Everyone will tell you that it huts exports by having a strong currency.  I typically respond with: No, not having anything to export is what hurts exports.

A strong dollar at this point means an opportunity to buy gold.  The priorities and goals have been made clear.  A strong currency is not one of them.

Comments are closed.