Advice written: January 2, 2005 MDSnews Investment Advisory
Context: Short-term Investing
Terminology: Communicating to experienced investors
Technically the US dollar looks to be bottoming and today’s ISM Number might be the catalyst for a rally to the upside.
Fundamentally, the 13 week bill yield has been rallying for eight months, eventually the sharp rise in short-term rates will filter through to the currency asset class and support a higher USD.
Warren Buffet has said he won’t be adding to his $12 billion US dollar short position over 1.20 Euros, so there goes some selling pressure. Jimmy Rogers is said to have cashed out of this Chinese commodity place for the short term, reducing selling pressure on the US dollar.
Lumber has dropped 30% suggesting the professionals might be getting out of the US housing market from the top of the food chain, so to speak. The rumor is the US housing bubble has been pushed along by foreign investment because of cheap US dollar.
Reproduced with permission