(This is an excerpt from an article I originally published on Seeking Alpha on June 1, 2012. Click here to read the entire piece.)
{snip} …U.S. nonfarm payrolls greatly disappointed markets and quickly put the dollar into general disfavor the rest of the day. Even the oversold euro rallied against the U.S. dollar (FXE). Interestingly, the dollar index peaked today almost exactly where it peaked ahead of the Fed’s communique on QE2. When discussing buying points for commodity-related stocks, I have called this point the QE2 reference price. While I expected commodities to eventually lose their post-QE2 gains, I never once thought abut the U.S. dollar recovering all its post-QE2 losses.
Source: FreeStockCharts.com
For anyone speculating on QE3, this “coincidence” is yet one more clue. Surely, the U.S. dollar has gotten uncomfortably high for the Federal Reserve in its quest to maintain accomodative monetary policy. {snip}
Be careful out there!
(This is an excerpt from an article I originally published on Seeking Alpha on June 1, 2012. Click here to read the entire piece.)
Full disclosure: long GLD, SLV