Monday, September 21, 2009
Dollar Bounces Off Of 76 Level
The US Dollar advanced on Monday, up for a third day versus the euro and a basket of currencies, as investors shied away from risk-oriented trades ahead of this week's meeting of U.S. Federal Reserve policy makers.As I noted recently that the 76 level would most likely present a technical bounce. The trend is still downward in my view, trading within a descending channel since June.
The Fed's rate-setting Open Market Committee could opt this Wednesday a signal it's ready to begin outlining an exit strategy from its massive monetary-stimulus efforts helped pressure equity markets, spurring support for the dollar. Also this week is a summit of the leaders of the Group of 20 global economic powers, which gets under way Thursday in Pittsburgh.
Still, dollar weakness has been exacerbated in recent weeks amid signs the greenback is taking on a role as a funding currency for carry trades, in which investors sell a low-yielding currency and purchase higher-yielding currencies.
Use any bounce here in the Dollar to buy on dips in equities.
Interesting view from veteran trader Art Cashin (CNBC)
*click on chart to expand image