Global Economic Pressures Continue to Push the Dollar Reluctantly Higher

This is an excerpt from an article I originally published on Seeking Alpha on November 27, 2011. Click here to read the entire piece.)

The U.S. dollar’s role as a “safety” currency has finally returned although the market has only reluctantly marched back to the dollar’s printing presses. This year’s first two market swoons sent the dollar index to lower levels. The last two swoons have sent the dollar soaring higher as the euro, and now the British pound, suffer particularly large hits. Even as the eurozone crisis supposedly gets worse than ever, the dollar index has not cracked the highs from last month. However, if the dollar index breaches this resistance level, I expect a further acceleration in the currency’s gains. The chart below summarizes the dollar’s gyrations for 2011.


The dollar has gone from much maligned to much desired in less than a year's time
The dollar has gone from much maligned to much desired in less than a year's time

Source: FreeStockCharts.com

As I claimed in mid-September, the dollar’s main attraction remains that the currency is a relatively cheap safe-haven. The dollar index remains near multi-decade lows… {snip}

Be careful out there!

This is an excerpt from an article I originally published on Seeking Alpha on November 27, 2011. Click here to read the entire piece.)

Full disclosure: net long the U.S. dollar, long GLD

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