Dollar Swoon Resumes

It appears the greenback resumed its swoon yesterday.

For reference, below are the US Dollar Index; the Euro Currency Unit & Aussie $ charts.

I favor the Euro as it represents over 60% weighting in the US Dollar Index, which makes it a good, high liquidity proxy in trading the buck’s value. The Euro zone has also been trashed for so long and the economic picture has been improving: so much so that investments which went to the United States are now starting to migrate back to Europe (Such is the ebb and flow of monies).

As for the Aussie $, it is undervalued to my eyes (It historically trades around parity with the greenback). Because of the nature of Australian commerce, many consider it the “commodity” currency. It’s probably the closest thing to a commodity index.

I consider limited risk plays against the greenback to be more than mere speculation, I feel it to be a form of insurance in that if the buck were to truly collapse, the ramifications to us all would not necessarily be pleasant. We all want the store of our worth not to lose value.

Regards,
Walt
Walter Otstott
Energies & Metals Markets
Dallas Commodity Company, Inc.
The Colonnade, Building III
15305 Dallas Parkway, Suite 930
Addison, Texas 75001
(972) 387-0080
(972) 387-0018, fax
(214) 537-9750, cell
walter@dallascommodity.com
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