The U.S. Dollar - Where To From Here
The U.S. dollar represents a gauge measuring the markets’ move toward high return/higher risk ($US falling) or risk aversion ($US rising). Longer term, we expect the U.S. dollar to continue its downward trend as the U.S. government issues massive amounts of new debt. However, in the short term, the dollar was rising as risk aversion grew. A major spike in the $US could cause a lot of commodity selling as speculators are leveraged to the long commodities/short $US trades. Uncertainty in the Euro zone had moved the U.S. dollar higher of late.
The U.S. Dollar Index is a weighted gauge against the Euro, Yen, Pound, and three other currencies.
