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U.S. Dollar (Forex): Feelings vs. Reality
Despite the gloomy news, the U.S. dollar has held its own, so far.
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By Vadim Pokhlebkin
Tue, 24 Nov 2009 13:45:00 ET |
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Glance at the recent news headlines, and it might feel like the world is ending for the U.S. dollar. Take a look at this sample line-up:
- US investors abandon the falling dollar to buy stocks (The Times)
- Dollar Slump Persisting as Top Analysts See No Bottom (Bloomberg)
- WORLD FOREX: Dollar Declines As Investors Embrace Risk (Wall Street Journal)
But "feels" is one thing -- and the reality of the situation is quite another. If you haven't recently seen a chart of the EUR/USD, the world's most watched (and traded) exchange rate, take a look at this November 23 chart from EWI's intensive Curency Specialty Service:
Despite the near-panicky headlines, you can see that for most of November the EUR/USD has gone sideways! Yes, big swings up and down -- but almost zero net progress, so far. In the words of EWI's president Bob Prechter,
"The headlines this month are all about the weak dollar, but they should be about how the dollar is hardly falling any more despite ubiquitous bearish opinion about it." (November Elliott Wave Theorist; online now.)
To find out what this sideways price action implies for the dollar short-term, read the latest EUR/USD intraday and daily forecasts inside Currency Specialty Service now.