I am looking at my Forex Trading charts at the end of what was a pretty amazing week. The dollar has clawed back some ground after the record losses that occurred because of the Fed deciding to print more money…a trillion dollars…to buy up treasuries etc, and therefore free up the purse-strings for everyone. Talk about quantitative easing…
A year ago, hearing a figure like that would have been downright frightening. However, all we’ve heard in the US over the last few months is “Bail Out” and “Budget Deficit” etc. All kinds of crazy figures have been tossed around, so this one doesn’t sound out of place in this environment. That said, it’s still major. Thus, the dollar rightfully lost a lot of ground over the last few days.
Today, there wasn’t much news that affected the Dollar directly. Traders took their profits. People have come to terms with what Fed Chairman Bernanke and his cronies have done. Calm has returned. However, I don’t think it is over yet. It’s hard to find fundamentals to back US Dollar strength in the short term. The long term view is different though. The European Central Bank and others will have to follow the Fed’s actions in some way down the line. When that happens, it will be the dollar gets the upper hand.
You can see him the Dollar sitting in the dark, licking it’s wounds. It looks up and, with an evil smirk on it’s green face, says “I’ll be back!”. Will it really? Well, that’s the joy of trading forex…I really don’t care either way. Dollar up or Dollar down, I still get the crown.
Forgive my poor rhyming skills.