Dollar Rally to Reverse Multi-year Downtrend?
Aug 6th, 2008 | By Charles Delvalle | Category: Financial News, US Dollar & Forex TradingWith some currency traders expecting the Fed to push rates higher to combat inflation, the dollar has seen recent strength. But will that strength last long enough to reverse the multi-year long dollar downtrend? It’s highly unlikely.
Since March, The U.S. Dollar Index (NYBOT: DX) has been consolidating between the 70 and 74 cent range. Since mid-July the dollar has mounted a strong rise to the top of this range. But with the continued risk of more foreclosures, multi-billion dollar losses in the financial sector, ballooning deficits and a sluggish economy, the dollar will have a hard time finding traction for a long-term move.
Strong rallies in the dollar should be seen as an opportunity to take a bearish position. Of course…