There are a number of arguments why the US dollar may be in secular decline. However a strongly held, long term thesis can work against catching intermediate term moves. One need only look at the number of bears on the US economy who were unable to catch the reversal in the US equity market over the past year and a half. A similar situation may be brewing with the US dollar as well. The dollar, for the time being, seems to have reversed course and is strengthening against commodity currencies like the Australian dollar. It may take some time to shake out all of the US dollar bears. In today’s screencast we note that even long term trends can have corrections.
Items mentioned in the above screencast:
“If your investment thesis centers around a continued dollar meltdown, you may want to get yourself a drawing board.” (Josh Brown)
The dollar squeeze. (FT Alphaville)
Large traders are reducing their Aussie dollar longs. (Data Diary)