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All this panic about the falling dollar over the past six months seems a bit revisionist to me given the massive rush into the dollar as everyone became hyper risk averse and fled foreign markets and currencies last September.



I agree.

Though it is a lot, the dollar has fallen from 90 to 75 ..... that is about 15%. Critical when figuring exchange rates, but also traceable in a large part to the fact That the discount rate is about .... 0%. Once the economy does show movement, the Fed will need to raise interest rates.

It's like your local bank offering X% for account interest and another offering X.5% .... you move your account. Same with currencies, the Fed pays little (or zero %) and investors go to a better paying currency. This "weakens" the dollar.

The economy begins to move, looks like inflation may be the next stop, the Fed raises rates to slow inflation ... strengthening the dollar.


http://www.marketwatch.com/investing/index/DXY

I think :)


Bears

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