Worth a read: “Betting Your Dollar’s Bottoming,” from Barron’s.
By Daniel at 16 November, 2009, 1:30 am
http://online.barrons.com/article/SB125811511153847019.html#articleTabs%3Darticle
“The U.S. is viewed abroad as the core of the system, he adds, and the dollar is a “public good” that is relied upon everywhere.
By providing a reliable reserve currency, the deepest and most liquid financial markets and government debt of unquestioned triple-A quality, in return the U.S. gets to borrow cheaply and obtain goods from around the world in exchange for its paper, El-Erian explains in an interview in Pimco’s Newport Beach, Calif., headquarters.
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Veteran technical analyst Martin Pring sees signs the Dollar Index may be on the verge of a rebound. In his weekly note to subscribers, Pring says the dollar has the potential to rally as it is “challenging” its downward sloping trend line while its rate of change is turning positive. At the same time, however, there also is a potential for the Dollar Index to break down as it has been moving in an ever-narrowing channel.
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And as the dollar firmed, commodities such as crude oil and gold backed off and stocks eased Thursday. Not much should be read into a single day’s action, but signs of a change in the weak-dollar-inspired rally in risk assets should be watched carefully.“
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