Many investors watching the news out of the United States and Europe have begun to anticipate a rapid downturn in US dollar values in the immediate future, it appears. Commentary on the disparity between the monetary policies of the Atlantic countries has begun to turn investors in favor of the euro.
Indeed, the looseness of US interest rates makes the dollar appear much less attractive than its main currency rivals amid the current market environment. But statements from the Fed support this laxity, a move which some have said represents a push to perhaps weaken the USD intentionally.
This is also a notion strengthened by the relatively high numbers of pensioner and other fund managers selling US bonds and notes in exchange for its European counterparts.
Whether the move is intentional or simply a side-effect of the current monetary environment is a question for economic historians. What is relevant for us, today, is that the US dollar is bearish. Traders who expect a sudden rebound in USD values may be acting against the common wisdom of the day. Anyone following the Fed's recent statements would be hard pressed to convince anyone that a strong dollar is desired at the moment.
