I was shocked this morning to see the large drop in the USDX; however, I’m near speechless at the loss suffered by the index. At the end of NYSE trading today the USDX was down 1.17% (-.88) to 74.24, virtually at the low of the session.
India’s decision to buy gold and the Fed comments on rates helped drive the dollar down, but remember there is very little support in the index until 72.00. I have no doubt that we’ll see a pullback in the next week, however, testing the 72 floor seems to be closers than ever. While I had expected to bounce around that target until Feb of next year, I wouldn’t be surprised to see that by the end of the year 09 OR early Jan 2010.
Anything can happen, yes. The government may change fiscal policy, yes. As long as the economy is weak, and the feds keep the rates low, the dollar will continue to head south. The lower it goes will also lead to selling pressure by those who invested in the currency. You very well may be witnessing the death of the dollar and as a result you should really be asking yourself how you will protect your future.
Think about it before you wake up one day with half of the purchasing power you have today.
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