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Dollar Fails Crucial Test
"This move has really lit a fire under the dollar bears," says Chuck Butler. "Many institutional investors use the dollar index as their means of trading the dollar. And to see it fall through its 200-day moving average was enough proof for them that the dollar is heading south. "The 200-day moving average, for those of you unfamiliar with this term, is a long-term moving average that helps determine the overall health of the asset, which, in this case, we’re talking about the dollar. It is, for all practical purposes, a dividing line, if you will, between as asset being healthy and one that is not." The dollar selloff has given a nice boost to other worldly monies. The euro popped to $1.36 over the weekend, and trades just a hair below that level this morning. Ditto the pound. It’s up as high as $1.52, just off its 2009 high. The yen is slowly growing stronger, now "down" to 97.
Addison Wiggin is the editorial director of The Daily Reckoning, and executive publisher of Agora Financial, a multi-million dollar financial research firm and publishing group based in Baltimore, Maryland. His second edition of The Demise of the Dollar… and Why it’s Even Better for Your Investments was just fully revised and updated. He is also the executive producer of and a writer of I.O.U.S.A. a feature length documentary film nominated for the Grand Jury prize at the 2008 Sundance Film Festival. The film is inspired by the international bestsellers Financial Reckoning Day and Empire of Debt, which he coauthored with Bill Bonner.
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05/11/09 Baltimore, Maryland The U.S. dollar failed an important technical test recently. Roll the tape:
