U.S. dollar: Rising to the occasion
The U.S. Dollar Index has been sliding steadily since June and with Ben Bernanke’s help it slid further still between September and November. During this time, the falling dollar pushed commodity prices up. Since the dollar is the reserve currency, nearly everything priced in it saw a jump in price.
Many feel a dollar collapse is coming. If that would happen, it would send the prices skyward. U.S. dollar bears will have to wait a while. The dollar is on the rise. Why? The debt problems in Europe are getting much worse. Like last year’s fear from Greek debt pressures, the EU now is finishing Ireland’s debt woes, and Portugal and Spain are in focus. Some estimates show a Spanish bailout would cost seven times that of Ireland’s $133 billion bailout.
Looking at the daily, weekly and monthly charts below, you will see that the technical picture, along with a worsening debt crisis in Europe, could send the dollar much higher. This rally could send us to the red trendline on the monthly chart below – somewhere in the 86 area.
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