We continue to view the Dollar as a range trade that can be played tactically until we see a fundamental change in Fed policy towards raising rates and the European Central bank add more extraordinary measures.
DXY index is off -85bps in afternoon trading, but that doesn’t mean the USD strength devastation is not being felt across the world.
LONG the US Dollar was a trade that for much of 2013 was a consensus view, but to many this trade failed despite the backdrop of a stronger US economy and the Fed in the wings to taper.
We have chronicled the structural condition of the Australian Dollar for 9 months on EmergingMoney.com pointing out that a combination of weaker Chinese commodity demand and local interest rate policy (driven by China’s impact on the economy) were going to pressure the Aussie to multiyear lows.
Yes, hard for most people who have ONLY lived through the markets with a strong commodity foundation to believe that the Canadian Dollar was once trading at 1.60/USD
Dollar Creeping Higher: Last night I named the Dollar as one of my “Lucky 7″ trades on our 7 year Fast Money anniversary show.
Interesting that it took a simulative Fed statement on tapering coupled with a rates outlook to give the Dollar Index (DXY) its biggest gain d/d since August.
Aussie Dollar -1.3% today and -2.5% over 2 days as commodity currencies will remain to be sold in this higher growth environment despite their linkage to growth.