US Dollar Index : Still firmly a dog, but due a technical rebound
July 26, 2011 Leave a comment
The USD Index is the main reason the Baht is strengthening, ditto the SGD, MYR, IDR…all ASEAN currencies apart from the inflation ravaged VND.
There is however a rebound due, and this could be the near term catalyst for a pullback in the likes of gold and silver, with a decent rally in oil, stocks and in the USD against pretty much everything in the currency markets.
If the US end up defaulting – which we view as almost 0%, or more likely, one of the ratings agencies have the balls to downgrade US debt, then we will have the most volatile few days in market trading since the Q1 pullback when the world just started to get used to Arab protests and bloodshed…… 800 or so points on the Dow over 3 weeks.
More likely is a deal and a rally in the dollar, probably from Wednesday or Thursday.